The National Bank of Poland took a decision lower the reference rate by 0,5% to 5,25%.

Story behind:

📈 NBP started to lift the interest rates in autumn 2021, when inflation started to rise (before the war started) 

📈 It is worth to remember that starting point was 0,25%, and about a year later reference rate raised the highest point, 6,75% level.

↔️ Current rate has been untouched since end of 2023

⬆️ Meanwhile, the inflation reached double digit numbers and stubbordingly stood at around 5% for longer time

📉 Now, in April, inflation dropped from 4,9% to 4,2%. 

📉 Also salary growth has dropped from double digit numbers to "only" 7,7%

Predictions:

⬇️ Inflation forecasts have been at 3,X% level for the year end, and reference rate forecasts at upper 4,X%

⬇️GDP forecasts are currently at 3,2-3,6%, bit down from the beginning of the year

Did the market react? Not really

➡️ Stock markets are slightly up after the decision

➡️ FX / PLN not a big changes

❓ Seems US decisions later today are more "important" for the market. Interesting to see how the market performs tomorrow.

Decision is definitely good news for companies planning investments and mortgage holders who have suffered from high interests. As the decreases are expected to continue, it will start boosting housing market too.