Poland Keeps Rates Unchanged as Fuel-Price Cap Curbs Inflation

Poland’s central bank kept interest rates on hold for a seventh straight month as the government’s move to cut fuel prices eased inflationary pressure in the short term.

The Monetary Policy Council kept the benchmark at 3.75% on Wednesday, as expected by all 34 economists surveyed by Bloomberg. The central bank will publish a statement at 4:15 p.m. in Warsaw and Governor Adam Glapinski is scheduled to hold a news conference at 3 p.m. on Thursday.

The decision comes days after the government revived measures to shield customers from spiking fuel prices at least until the end of this year. The move is set to slow inflation to 3.3% in October after it spiked to 4% in September, according to economists at Credit Agricole Bank Polska SA.

Credit Agricole, along with several other banks, expects a hike in November to help anchor inflation expectations and limit second-round risks from fuel costs. The MPC targets price growth over the medium-term at 2.5%, with a tolerance band of plus/minus one percentage point.

Traders pared wagers on Polish rate hikes after the government introduced caps on fuel prices starting last Saturday, according to forward-rate agreement contracts.

Erste Bank Polska SA economists see a new inflation projection in November showing a “markedly higher” path, potentially approaching 5% during the first half of 2027, which could fuel rate-increase discussions. Still, the MPC “won’t rush into decisions,” they added.

“We maintain our baseline scenario of unchanged rates through the end of 2027,” Erste economists led by Piotr Bielski said in comments published before the rates announcement. “Although the risk of moderate rate hikes early next year is increasing, should commodity markets fail to de-escalate and the inflation outlook fail to improve.”

Glapinski — who last month said that rates could stay on hold until mid-2027 — sounded more hawkish in comments made on Sept. 30, just days before the new fuel measures were announced. The central bank “will act responsibly and decisively to keep inflation low,” the governor said.