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Poland surprisingly does not raise its interest rates

Neither the neighbouring Czech Republic nor Hungary are likely to raise rates. Is this the end of interest rate hikes?

In a recent article, we informed you that the UN calls on central banks to halt interest rate hikes.

Poland’s central bank said in a statement that it surprisingly kept the base rate at 6.75%. Joining the Czech National Bank (CNB) and the Hungarian central bank, which have also already announced that they will stop raising rates.

Analysts had expected the bank to raise the rate by 0.25% to 7% due to rising inflation. This was mainly because Poland’s inflation rate rose 1.1% year on year to 17.2% in September. The bank had previously raised rates eleven sessions in a row.

Close-up on Polish zloty in various denominations taken from the wallet

What is expected in the future?

According to the bank, economic growth is expected to slow further in the coming quarters and the economic outlook is subject to considerable uncertainty. However, the central bank stressed that despite the deteriorating economic conditions, the labor market situation remains very good. This is reflected in the record low unemployment rate, which stood at 4.8% in August.

Read also: Weekly macro report – Inflation-linked bonds are attractive

Poland’s central bank started raising interest rates last October. It joined central banks in the Czech Republic and Hungary, which started raising interest rates in June last year. Hungary now has the highest base rate in the European Union, with its central bank raising it by 1.25% to 13% at the end of September. The Czech National Bank left the prime rate at 7% at the end of September, where it has been since the end of June.

If you are interested in how other central banks are behaving, we recommend reading our recent article where we described the situation in more detail.

Bruno is an Investment enthusiast with several years of experience in the industry. He enjoys following the latest news and technology trends...


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