NBP MPC Press Release - 2020-12-02
Central bank: nbp | Type: decision | Date: 2020-12-02

Warsaw, 2 December 2020 
Information from the meeting of the Monetary Policy 
Council held on 2 December 2020 
 
The Council decided to keep the NBP interest rates unchanged: 
 
• reference rate at 0.10%; 
• lombard rate at 0.50%; 
• deposit rate at 0.00%; 
• rediscount rate at 0.11%; 
• discount rate at 0.12%. 
 
NBP will continue to purchase government securities and government-guaranteed 
debt securities on the secondary market as part of the structural open market 
operations. The timing and scale of the operations will dep end on the market 
conditions. Furthermore, NBP will offer bill discount credit aimed at refinancing 
loans granted to enterprises by banks. 
 
GDP data point to a strong global economic recovery in 2020 Q3, but the activity in 
most countries did not return to its pre-pandemic levels. At the same time , a significant 
increase in the number of new COVID-19 cases in recent months together with renewed 
tightening of the pandemic restrictions in many countries – in particular European ones 
– have contributed to the deterioration of economic conditions, especially in services. As 
a consequence, many economies will probably see another drop in GDP in 2020 Q 4. The 
further course of the pandemic remains the main source of uncertainty for economic 
prospects in the comi ng quarters. Under these circumstances, major central bank s keep 
interest rates at low levels and conduct asset purchases. 
Information on the results of COVID-19 vaccines clinical tr ials has contributed to 
some improvement in global fina ncial market sentimen t. At t he sa me time, g lobal 
commodity prices remain significantly lower than at the beginning of the year. Lower 
commodity prices along with w eaker economic activity have contributed to inflation 
staying at low levels in many countries, including Poland’s main trading partners. 
In Poland, t he 2020 Q3 GDP data confirmed a strong rebound in economic activity 
compared to previous quarter, but the GDP year-to-year growth rate remained negative. 
The increase in annual GDP growth rate was supported by the recovery in consumption 
demand. Amid improved economic conditions abroad, exports also accelerated. In turn, 
investment was significantly lower than a year before. 
The sharp increase in the number of new COVID-19 infections along with the 
tightening of the epidemic restrictions and weakening sentiment of economic agents in 
 
 
October and November contributed to the deteriorating economic conditions in recent 
period, especially in the service sector. Current forecasts indicate that GDP will decrease 
in 2020 Q4 compared to previous quarter. 
The lab our market data for O ctober indicate a further increase in employment in 
corporate sector on monthly basis accompanied by lower wage growth in this se ctor. At 
the same time, inflation in November – according to the Statistics Poland flash estimate – 
stood at 3.0% y/y (compared to 3.1% y/y in October). 
It could be anticipated that – after a fall in 2020 – the economic acti vity would 
rebound next year , but the GDP would probably remain lower than prior to the 
pandemic. The uncertainty about th e economic prospects persists, driven by incertitude 
regarding further course of the pandemic and its effects on economic conditions at home 
and abroad. Domestic economic situation will be supported by the economic policy 
measures, including the easing of NBP's monetary policy. In turn, economic activity may 
be limited by increased uncer tainty and weaker sentiment of economic agents than in 
previous year . The pa ce of recovery m ay also be re duced by the la ck o f a visible a nd 
more durable zloty exchange rate adjustment to the global pandemic -driven shock and 
to the monetary policy easing introduced by NBP. 
NBP will continue to purchase government securities and government -guaranteed 
debt securities on the secondary market as part of the structural open market operations. 
These operations are aimed at changing the long-term liquidity structure in the banking 
sector, ensuring the liquidity in the secondary markets for the purchased securities and 
enhancing the impact of the NBP interest rate cuts on the economy, i.e. strengthening the 
monetary policy t ransmission mechanism. The timing and scale of the operations will 
depend on the market conditions. Furthermore, NBP will offer bill discount credit aimed 
at refinancing loans granted to enterprises by banks. 
NBP’s monetary polic y mitigates the negati ve economic impact of th e p andemic, 
supports economic activity and stabilises inflation at the level consistent with the NBP’s 
medium-term inflation target. Due to its positive impact on the financial situa tion of 
debtors, it is also conducive to the strengthening of financial system stability.