The Monetary Policy Council (MPC), the rate-setting body of the National Bank of Poland (NBP), is unlikely to discuss reducing the central bank’s reference rate before October 2025, NBP Governor Adam Glapinski said on December 5. 

Glapiński’s hawkish remarks represent a shift from earlier expectations that rate cuts could begin as early as mid-2025.

At a press conference, Glapinski said inflation risks may delay cuts until 2026. “The council will move to a debate, or even a decision, only when inflation stabilises and projections clearly indicate a decline,” Glapinski said.

The MPC kept the central bank’s reference rate unchanged at 5.75% on December 4, extending a 14-month freeze at its two-decade high. The decision met market expectations, reflecting persistent inflationary pressures despite some recent easing.

Inflation remains a significant concern, with the consumer price index (CPI) rising 4.6% year-on-year in November, slightly down from 4.9% in October.

The NBP pointed to energy price increases, planned excise duty hikes, and rising costs of administered services as key factors sustaining high inflation. The anticipated unfreezing of energy prices in late 2025 adds further uncertainty, potentially postponing any rate cuts.

"This postpones the return of inflation to the central bank's target by six months compared to the baseline scenario in the NBP's November projection, thereby delaying the start of the easing cycle," ING bank said in a note.

Analysts noted the more hawkish tone in the NBP's December statement, contrasting with a more lenient outlook in previous months. “Any dovish pivot is premature,” ING said in response to the rates decision, noting the renewed emphasis on energy price risks.

For now, the NBP’s restrictive monetary policy reflects its commitment to curbing inflation. The timeline for future decisions will depend on inflation dynamics and economic forecasts, with rate cuts likely contingent on clear evidence of declining inflation.