FX.co ★ Poland Pauses Rate Cuts as Expected

The National Bank of Poland (NBP), during its meeting held on June 3-4, 2025, decided to maintain its benchmark interest rate at 5.25%, aligning with general expectations. This decision followed a prior reduction of 50 basis points in May. Alongside this, both the Lombard and deposit rates remained steady at 5.75% and 4.75%, respectively. This pause in the easing cycle underscores a cautious approach due to ongoing high inflation, strong economic growth, and uncertainties in global trade policies. For May, the annual inflation rate dropped to 4.1% from 4.3% in April, marking the lowest point since June 2024, though it still significantly exceeded the central bank’s 2.5% target. Concurrently, the economy experienced a 3.2% year-on-year growth in the first quarter, a slight deceleration from the 3.4% growth recorded in the final quarter of 2024, which had been the quickest pace since the third quarter of 2022. Labor market conditions remain tight, characterized by low unemployment rates and high participation, despite a decline in enterprise sector employment compared to the previous year. The NBP stressed that forthcoming policy decisions will be influenced by forthcoming data on inflation and economic activity.