NBP MPC Press Release - 2020-10-07
Central bank: nbp | Type: decision | Date: 2020-10-07

Warsaw, 7 October 2020 
 
Information from the meeting of the Monetary Policy 
Council held on 7 October 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 depend on the market 
conditions. 
Furthermore, NBP will offer bill discount credit aimed at refinancing loans granted 
to enterprises by banks. 
 
Incoming data confirm ed that following a sharp fall in global GDP in 2020 Q2, the 
economic activity has been re covering in recent months. The improvement in the global 
economic conditions has been support ed b y e arlier easing of contain ment restrictions, 
introduced fiscal m easures as well as the accompan ying easing of monetary po licy, 
including interest rate cuts and asse t purchases. Despite the rebound, economic activity 
in most countries remains lo wer than before the outbreak of the pandemic. R ecently, 
there has been a renewed increase in number of new Covid-19 infections. As a 
consequence, t he uncertainty about the furt her course of the pandemic as well as the 
pace and robustness of the recovery in the global economic conditions has also increased. 
The growing number of new Covid-19 cases has contributed to some deterioration in 
global financial market sentiment, mirrored inter alia in depreciation of emerging market 
currencies. Prices of commodities on the global mar kets remain significantly lower than 
at the beginning of the year. Along with weaker economic activity, this has contributed 
to inflation staying at low le vels in many countries, including Poland’s main trading 
partners. 
In Poland , the incoming data indicated a recover y in economic activity in 2020 Q3, 
after a significant fall in GDP in 2020 Q2. At t he same time, d ata on retail sales and 
production in August suggested that the economic recovery has slowed down compared 
to previous mo nths. This was accompanied by a stabilisation in the number of people 
 
 
employed in enterprise sector , along wi th wage growth in this sector staying 
significantly below its pre -pandemic level . At the same time, inflation in September – 
according to the Statistics Poland flash estimate – stood at 3.2% y/y. 
A further recovery in economic activity may be expected over t he coming months , 
however its pace may be slower than observed so far. The improvement in the economic 
situation will be supported by economic policy measures, including the easing of NBP's 
monetary pol icy. At the same time , an increase in activity may be curbed by high 
uncertainty about the fur ther course and effects of the pandemic and weaker sentiment 
of economic agents than in previous years. The economic conditions in the environment 
of the Polish economy will also have a significant impact on the activity growth. The 
pace of the ec onomic recovery could also be limited by the l ack of visible and more 
durable zloty exchange rate adjustment to the glo bal pandemic-driven shock and to the 
monetary policy easing introduced by NBP. 
NBP will continue to purchase government securities an d gov ernment-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 market s for the purchased securities and 
enhancing the impact of the NBP interest rate cuts on the economy, i.e. strengthening the 
monetary policy transmission mechanism. The timing and scale of the operations will 
depend on the market conditions. 
Furthermore, N BP wi ll also offer bill discount credit aimed a t refinancing loans 
granted to enterprises by banks. 
The NBP mone tary polic y easing mitigates the negative economic impact of the 
pandemic, supports economic recovery and reduces the risk of inflation falling below the 
NBP inflation target in the m edium te rm. D ue to its positive impact on the financial 
situation of debtors, it is also conducive to strengthening of the financial system stability.