ING economists expect the National Bank of Poland to keep interest rates unchanged after the April Monetary Policy Council meeting left the reference rate at 3.75%. The Council delivered a 25bp rate cut in March before holding rates in April.
The April statement was brief and neutral, and it linked global fuel price rises to supply constraints tied to the conflict in the Middle East. The Council is expected to take a wait-and-see approach based on incoming data and the effect of geopolitics and commodities on inflation and growth.
Inflation Drivers And Policy Signals
The NBP governor said near-term inflation will depend on energy commodity prices such as oil and natural gas, plus domestic tax and regulatory decisions, including excise duty and VAT on fuels. The Council is also expected to watch how higher fuel costs pass through to other prices.
Future policy is expected to depend on commodity prices, geopolitics, fiscal policy, fuel price rules, GDP changes and wage dynamics. ING’s baseline assumes the Lower Fuel Prices programme (CPN) lasts until the end of July, with average annual inflation at 3.2%, versus about 2% before the Persian Gulf war and 2.3% in the NBP’s March projection.
Under this scenario, rates could remain unchanged until at least end-2026, with a low probability of hikes.
Looking back at the analysis from 2025, the prediction for a prolonged hold by the National Bank of Poland has been accurate. The reference rate has indeed remained at 3.75% into the second quarter of 2026. This stability confirms the cautious, data-driven stance the Monetary Policy Council adopted following geopolitical shocks last year.
Market Implications For Rates And Volatility
The key challenge now is sticky inflation, which is proving more persistent than anticipated in 2025. While last year’s annual forecast was 3.2%, recent data from Poland’s statistics office for March 2026 shows headline inflation at 3.5% year-over-year. This is keeping the central bank firmly in its wait-and-see mode, as the pass-through effects from energy and wages continue to be a primary concern.
Strong domestic demand, fueled by a tight labor market with unemployment holding at a low 3.1%, is supporting wage growth and underlying price pressures. While Brent crude has stabilized around $88 per barrel, down from the peaks seen during the 2025 Persian Gulf conflict, the risk of energy price volatility remains. These factors combined make a compelling case for the NBP to continue its holding pattern through the summer.
For traders, this signals that the front end of the Polish zloty interest rate curve should remain anchored. We expect Forward Rate Agreements for the next two quarters to continue pricing in no change from the current 3.75% level. This environment suggests that income-generating strategies that benefit from low rate volatility are likely to be favored over directional bets on rate cuts or hikes.
However, options on Polish interest rate swaps may be underpricing the risk of a hawkish shift later in the year if inflation does not cool as expected. Given the NBP’s focus on wage dynamics and fiscal policy, any upside surprises in this data could quickly change the market narrative. Therefore, positioning for a potential, though currently unlikely, rise in interest rate volatility could be a prudent long-term hedge.
