Poland’s Monetary Policy Council has agreed to raise interest rates by 0.75 percent, meaning that the central bank’s annual interest rate now stands at 5.25 percent. The interest rate increase will raise borrowing costs for Polish citizens and businesses.
Following the move, the marginal facility rate will now be 5.75 percent, the deposits rate 4.75 percent and the discount rate on debt securities 5.35 percent.
This is the eighth successive rise in interest rates and marks the highest interest rate for the central bank since the financial crisis of 2008. The first increase in the current cycle dates back to October of last year. Since then, interest rates have risen every month.
The interest rate increases are aimed at cooling down demand in order to limit inflation. The interest rate in the period since October has risen from record lows of 0.1 percent to today’s high of 5.25 percent.
As a consequence, mortgage repayment rates will rise on a monthly basis and mortgage rates are now above 6 percent.
Few forecasters believe that this is the end of interest rate rises. Most economists expect more interest rate rises to use monetary controls to limit inflation.