FX.co ★ Poland Continues Cutting Key Interest Rate as Expected

The National Bank of Poland (NBP) reduced its benchmark interest rate by 25 basis points to 4.75% during its meeting on August 2–3, following a similar 25 basis point reduction in July, which aligned with market expectations. The Lombard and deposit rates were also lowered to 5.25% and 4.25%, respectively. This decision was influenced by consistently declining inflation, with the headline Consumer Price Index (CPI) decreasing to 2.8% in August, marking the lowest level since June 2024. This rate remains within the central bank's target range of 2.5% ±1 percentage point. The Polish economy grew by 3.4% year-on-year in the second quarter of 2025, maintaining a steady pace of around 3% since the second quarter of 2024, although the unemployment rate increased slightly to 5.4% in July. This move signifies the NBP’s ongoing adjustment of monetary policy in response to moderate inflation.