Interest rates are back in the group. There is a MPC decision. This is the ninth flight in a row

75 basis points or 0.75 percentage points – The Monetary Policy Council raised interest rates in Poland at its meeting on Wednesday. From Thursday, June 9, the NBP reference rate will be equal to this rate 6 percent This is the highest level since 2008.

• Read more about inflation on the homepage Gazeta.pl

Inflation in Poland has breached the ceiling again. The Central Bureau of Statistics released disastrous data for the month of May

High interest rates – not surprising

The MPC has been raising interest rates in Poland since October 2021 every month at every meeting. Earlier, for about a year and a half, the reference rate of the National Bank of Poland was only 0.10%.

The ninth consecutive rate hike in June this year. Not a surprise at all. Analysts did not expect a different decision. The MPC members have no doubt that it is not yet time to end the rate-raising cycle.

During the press conference in May, NBP Chairman (and Monetary Policy Committee Chairman) Adam Glapinsky announced that the Monetary Policy Board would continue to raise rates “until it makes sure that the inflation “It will be a long and painful process,” Glapinski said.

According to some economists, there is a possibility that inflation in Poland will reach its peak in the summer and the rate-raising cycle may end, for example, in September (without the MPC meeting in August).

At the same time, during the press conference in May, Glapiński announced that when inflation falls, interest rates will also be lowered. – Borrowers should remember this – says the head of the Polish Central Bank. He added that he hoped prices would start to fall End 2023

What will the NBP chief say at the press conference in June? We’ll find out on Thursday, June 9th. The conference will start at 15:00.

Inflation slows in the second half of the year? Predictions of the Minister of Finance

Interest rates are rising, but will the MPC succeed in lowering inflation?

Of course, the MPC’s rate hikes are meant to combat inflation. On the other hand, some council members point out that the government is the spoiler in this endeavour.

The Monetary Policy Board has been raising interest rates for several months. At the same time, the government is doing its best to keep this inflation growing and explaining to the people that what it is doing is reducing this inflation. It is exactly the opposite. All the tools that have been implemented so far have been tools that have led to an increase in inflation

– Ludwik Kotecki, MPC member, spoke in mid-May on RMF FM.

The last controversial measure would be a vote on credit leave for a very broad group of borrowers. This will likely happen on Thursday, June 9th. Not only are the banks opposed to the solution, but also, among other things, are representatives of NBP and the Polish Financial Supervisory Authority. They argue that subsidies should be directed only to borrowers in the most difficult situations.

Interest rates are rising, and so are loan installments

Obviously, raising interest rates by the MPC raises loan installments. Those borrowers who borrowed recently, say a year or a half ago, suffer the most. For example, installment credit For 30 years against 500 thousand PLN was incurred in January 2021 (with a margin of 2% + Webor 3M) initially around 1900 PLN. With WIBOR today, it is already twice as high (about PLN 3860).

More price hikes will pay premiums more. Currently, forward rate agreements (FRA), which can be treated as investors’ expectations of future WIBOR rates, indicate that 3M WIBOR in three months could reach 7.7% and 7.9% in six months. For a typical loan from the example above, this may mean a jump in the premium to the level of about 4200 PLN.

• Help Ukraine, join the group. You deposit money on the site pcpm.org.pl/ukraina