Interest rates – loan installments. MPC meeting 8/02/2022 – economists’ forecasts – Nach Welt

On Tuesday, there will be a meeting of the Monetary Policy Council, which will decide on the level of interest rates in Poland. Economists are convinced that there will be another, fifth increase in a row, which would translate into an increase in loan installments. Analysts’ forecasts are presented below.

The Monetary Policy Council has recently decided to raise four interest rates. In October 2021, the main central bank rate increased from 0.1 to 0.5 percent. It was the first increase since May 2012. In November, the main interest rate increased by 75 basis points and in December by 50 basis points. During the last meeting in January, the Council decided to raise the NBP interest rates once again by 50 basis points. As a result, the main benchmark interest rate is at 2.25 percent. This is the highest level since August 2014.

NBP reference ratePAP / Adam Ziemienowicz

Economists are convinced that next Tuesday, February 8, there will be another interest rate hike.

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Interest rates in Poland – forecasts

PKO BP and Bank Pekao forecast that the main reference rate of the National Bank of Poland will increase by 50 basis points. MBank’s economists think similarly. “In our opinion, the MPC will decide to raise interest rates by 0 50 bp. which means that the reference rate will be 2.75 percent. However, the risks are spread upwards (larger scale of the increase), mainly due to recent statements of the NBP president (“Rates should be higher than the market currently expects”), they indicated in Monday’s comment.

At the same time, according to mBank representatives, “attention to growth and the real economy” will prevent the MPC from aggressive actions. “It is more likely that the rate hikes will be extended over time than their concentration with a simultaneous increase in the scale of the ‘step'” – they forecast.

Crédit Agricole economists expect a bigger increase. In their opinion, the MPC will raise the main interest rate by 75 basis points. “The scale of the rate hike we forecast at this week’s meeting (75 bp) is greater than market expectations (50 bp), they indicated. “Support for the monetary policy tightening scenario are, inter alia, last week’s comments of the NBP President, in his opinion the zloty should strengthen Three weeks ago, A. Glapinski also stated that interest rates should rise more than was expected by this market. ” – explained the economists Credit Agricole.

The President of the National Bank of Poland, Adam Glapiński, admitted a few days ago that a stronger zloty would strengthen the impact of interest rate increases in Poland. – Today the appreciation of the zloty would support the monetary policy tightening and would be consistent with the direction of the central bank’s actions – said Glapiński in response to Bloomberg News questions. – We want to lower inflation in a sustainable manner – he added.

Morgan Stanley economists in their analysis published last week stated that a rate hike by 75-100 basis points at the next meeting cannot be ruled out, however, considering the scenarios from 50 to be the basic one.

“In view of inflation remaining above the upper band for deviations from the target, tun II Pol. 2023 And with continued strong economic growth, we expect a longer cycle of interest rate increases in Poland. We expect the MPC will raise rates by 50 bp. In February and by 25 bp. In March. We also believe that the rpp will continue to gradually increase the pO stoppt by 25 bp. W. II AND III QUARTERS ON CO-PRODROSTENZIEGEN SUSTAINABLE ECONOMIC GROWTH. AGAINST THE ABOVE CURRENTLY WE CONSIDER THAT THE REFERENCE POPA Will reach 3.75 proz. Machen Aug September versus the previous target rate forecast of 3%. in March, ”wrote economists Morgan Stanley.

Economists from Santander Bank Polska admit that the MPC may consider a larger rate hike on Tuesday. “Recent comments from President Glapiński that he cares about the strengthening of the zloty (DOSC, a clear change in the front in this topic) and that there is still a ‘big space for further rate hikes’, suggest in our opinion that the MPC may consider a larger scale of the move, if seriously is thinking about giving a currency an appreciation impulse. Although the zloty reacted in recent days to the comments of the NBP governor, and then to the information suggesting a possible de-escalation of conflicts with the EU, the move was moderate and not very durable, as a result it is difficult to consider that it will significantly help Zu in the fight against inflation. We are betting, however, that instead of a larger scale of the rate hike, the NBP governor will choose the more hawkish tone of his press conference, “Santander’s representatives wrote in their weekly newsletter.

A press conference of the President of the National Bank of Poland, Adam Glapiński, is scheduled for Wednesday, February 9, at 15.00.

Loan installments

MPC decisions have an impact on WIBOR (three-month, six-month), which at the same time translates into loan installments. The main analyst of HRE Investments, Bartosz Turek, prepared calculations of the potential amounts of installments of housing loans taken for 25 years with a margin of 2.6%. after the increase in interest rates.

Estimates show that in the event of an increase in interest rates by 50 basis points to 2.75 percent. loan installment in the amount of 300 thousand. PLN would increase from PLN 1,880 to PLN 1,972. It means an increase in the installment by PLN 92 per month. For comparison, before the first October increase, the installment for such a loan was PLN 1,393.

In the case of a loan for 400 thousand. The installment would increase by PLN 122 – from PLN 2507 to PLN 2629. The difference is the greater, the greater the amount of debt incurred. Those who repay a loan of PLN 500,000 PLN, they would pay PLN 3286 per month instead of PLN 3133 as at present, i.e. PLN 153 more.

In the case of a stronger increase in interest rates by 75 basis points to 3%. loan installment in the amount of 300 thousand. PLN would increase from PLN 1,880 to PLN 2018. In the case of a loan for 400 thousand. PLN installment would increase from PLN 2507 tun PLN 2691. Those who repay a loan of PLN 500,000 PLN, they would pay PLN 3364 per month.

HRE-Investments

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Reference-www.nach-welt.com

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