Polish Central Bank cuts interest rate to 3.75%, ignoring soaring energy prices

LootboxPhobia · 2026-03-05T02:59:05+00:00

The Polish central bank this week cut its policy interest rate by 25 basis points to 3.75%, surprising observers. Despite rising energy prices putting inflationary pressure, the central bank chose to ignore this volatility. The inflation rate in January was 2.2%, below the target, and weak wage growth has eased concerns about future inflation. The easing cycle is nearing its end, with possibly only one more rate cut remaining.

LootboxPhobia

2026-03-05 02:59:05

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Investing.com – The Polish central bank cut its policy interest rate by 25 basis points to 3.75% this week, despite recent surges in oil and natural gas prices, which surprised observers.

The Monetary Policy Committee pushed ahead with the rate cut despite earlier energy price increases that impacted inflation. This decision indicates that the central bank is ignoring fluctuations in energy prices.

Before weekend events in the Middle East, market conditions supported lowering the rate to 3.75%. Poland’s January inflation rate was 2.2%, below the central bank’s 2.5% target. This is the second-lowest inflation reading since early 2019.

Recent wage growth data also shows weakness, which will ease concerns about future inflation pressures before the rate decision.

The easing cycle appears to be nearing its end, with possibly only one more 25 basis point rate cut remaining. Despite the clear dovish stance of the Monetary Policy Committee, this assessment still holds.

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