There are no MPC meetings without interest rate hikes

Inflation is so high that the MPC has been raising rates at every monthly meeting since October. This time the rates increased by 0,50 pp. The basic interest rate is now 2,75%. This year we expect over 250 rate hikes worldwide.

The Monetary Policy Council is consistent

The MPC has been raising rates at each of its meetings since October. From 0,1 percent. interest rates increased by 2021 pp in October 0,4, by 0,75 pp in November, and by 0,5 pp in December and January. This month the rate hike was again 0,50 pp, which means that the basic rate NBP it is now 2,75 percent.

Rate increases increase interest rates on bank deposits, but the difference between the interest rates and 8,6% in December. inflation (and possibly above 9% in January) remains high. Thus, depositors lose up to 6% a year on them. Rising rates are also translating into an increase in mortgage rates. From the beginning of the series of increases, a housing loan installment of PLN 300. PLN for 25 years (with a margin of 2,6%) increased by 35%, i.e. by PLN 485. A further increase in rates by each 1 pp means an installment higher by PLN 180.

It makes up for the delay

Poland is not unique, because almost the whole world is now raising rates. The MPC started a series of increases only in October 2021, i.e. later than other central banks in our part of Europe. However, it is currently trying to make up for the delay. Throughout 2021, we recorded over 100 rate hikes worldwide by various central banks. This year, analyzing the data for January, we expect that the rate hikes may be even twice as high. In the near future - probably in 36 days, we will face the first interest rate hike in the US (and then four more by the end of the year). And in the fall the market predicts the possibility of the first rate hike in the euro zone. China remains the exception in a world where rates are being cut.

About the author

Pawel Majtkowski - analyst eToro on the Polish market, which shares its weekly commentary on the latest stock market information. Paweł is a recognized expert on financial markets with extensive experience as an analyst in financial institutions. He is also one of the most cited experts in the field of economy and financial markets in Poland. He graduated from law studies at the University of Warsaw. He is also the author of many publications in the field of investing, personal finance and economy.