Poland's central bank left its key interest rate unchanged at 4% on Wednesday, marking the second consecutive monthly pause in an easing cycle that unfolded during 2025. The Monetary Policy Council's decision was consistent with the expectations of most analysts and comes after recent economic releases showed growth outpacing forecasts.
The vote by the 10-member council follows an earlier pause in January. In announcing that earlier hold, the MPC said it required more time to assess the economic effects of the 175 basis points of rate reductions enacted across 2025. With Wednesday's decision, policymakers again signaled patience as they evaluate the transmission of those cuts.
Underlying the council's deliberations are mixed signals from the data. Inflation was measured at 2.4% in December, a shade below the bank's 2.5% target, suggesting subdued price pressures. At the same time, Poland's economy grew by 3.6% in 2025, a rate described as stronger than many economists had expected in advance of the figures.
Governor Adam Glapinski, who generally guides the council's direction, has said there is limited scope for additional rate reductions while noting that inflationary pressures remain minimal after a period of relatively tight policy. That characterization of the outlook appears to have weighed on the council's choice to maintain the current stance.
Market participants will have the opportunity to hear more from the central bank soon: the institution is due to publish a formal statement at 4 p.m. in Warsaw, and Governor Glapinski is scheduled for a monthly press conference at 3 p.m. on Thursday. Those events are likely to provide further explanation of the council's assessment and any guidance on future action.
Context and implications
The council's decision preserves the policy rate at 4% while policymakers continue to monitor how the substantial easing that occurred in 2025 affects inflation and activity. The combination of below-target inflation in December and stronger-than-expected economic expansion in 2025 creates a situation in which the bank is balancing risks and awaiting clearer evidence on the full impact of prior moves.
Investors and businesses will be watching the bank's forthcoming statement and the governor's press conference for additional detail on the council's read of incoming data and any signals about the timing or scope of future policy adjustments.