This will be a serious threat to our wallets. A difficult year is ahead of us

Until a few months ago, no one thought about interest rates. Poles took advantage of the dovish monetary policy pursued by the MPC and no one thought about the consequences.

And we appealed not to get into debt if our income allows us to pay the installments “on the spot”. It’s always a good idea to have at least a 50% margin in case of a spike in interest rates.

It seems that the dark scenario is slowly materializing. It is enough to look at what is happening on the market and how it anticipates further monetary policy in Poland.


Derivatives are useful here, and more specifically – forward rate agreements (FRAs). This is called a contract for a future interest rate. In this way, market participants estimate what the main rate in Poland will be, e.g. in a year.

Let’s look at a 6×12 FRA contract, which could be the equivalent of a 6M WIBOR rate. The same one many banks today use to set mortgage rates.

Today, WIBOR 6M fluctuates around 2.80%, but is gradually growing. The analysis of the FRA contract shows that the market in a year it already expects a level of 4.31 percent. This means that WIBOR will be 50% higher than today. In the case of the 3M WIBOR rate, forecasts are 4.13 percent.

This is how FRA contracts have grown throughout 2021. Now the market expects an interest rate of 4.3 percent. in a year.

Application? The interest rate hikes are not over yet and are not likely to end soon. At least that’s what the market predicts.

Also read: The NBP significantly raised its inflation forecasts. President Adam Glapiński especially for Business Insider Polska [TYLKO U NAS]

Another MPC decision in January

However, the signals coming from the Monetary Policy Council itself confirm what can be seen in the FRA quotes.

– There will be a high probability of further interest rate hikes – the most likely move of the MPC in January is a 0.5 percentage point hike. – said Dr. Łukasz Hardt, member of the Monetary Policy Council in mid-December.

In turn, Kamil Zubelewicz, his colleague from the Council, even talked about an increase in the reference rate to 4.5%, which is even higher than provided for by FRA contracts. Let us remind you that today it is 1.75 percent.

We will know the decision of the MPC right after the new year. The meeting was moved from mid-month to Wednesday 4 January. Interestingly, the members of the Council will not know the inflation level in December then. The GUS reading is not scheduled until January 7th.

Poles are already feeling the increases, and it will be even worse

Even without further rate hikes, many Poles feel the effects of the MPC’s actions so far.

As we wrote a few days ago in Business Insider Polska, it is now that borrowers receive letters from banks with information about raising the interest rate on their loans.

Because the practice is that the effect of the decision of the Monetary Policy Council for many Poles will be felt only after some time.

– Banks update the interest rate tables most often every 3 months – then Jarosław Sadowski, the chief economist of Expander told us.

This means, however, that there is an even worse period ahead of us. Since for many of us such a letter from the bank is already shivering for many of us, then what happens when the black scenario contained in the FRA contracts materializes?

In such a situation, many Poles may have problems repaying the loan. With the WIBOR 6M rate at the level of over 4 percent. installments may increase significantly.

The strongest for those who have just got into debt. – Their debt is the highest, so installments increase the most – Jarosław Sadowski explained in Business Insider Polska.

How much will the loan installment be with interest rates at 4 percent? The economist Rafał Mundry presents the exact estimates on Twitter.

With a loan of 400 thousand PLN, which is basically the norm in large cities today, loan installment may amount to approx. 2.5 thousand in the beginning of the year. zloty. And a few months ago it was about 1.7 thousand. zloty. And the FRA contracts already speak of a level higher than 4%, so the installments will automatically increase even more.

For many Poles today, paying a mortgage takes up half of the salary. Especially when we look at these less prosperous regions of the country.

How many percent of the average net salary is absorbed by the installment of a sample “new” loan today? Own calculations based on the Central Statistical Office and Expander Advisors data


This is the case today, when the installment of a sample loan is approx. 1.7-1.8 thousand. zloty. After it grows to 2.5 thousand. PLN, will already be more than, for example, the minimum net wage. More than 2 million Poles earn this money every month.

It all depends on inflation

Since October, in order to fight inflation, the MPC has raised interest rates three times. As a result, the reference rate rose from 0.1 percent. up to 1.75% Further moves will certainly depend on how fast the price increase in Poland is.

And inflation in Poland is breaking new records. In November, the prices of consumer goods and services increased by an average of 7.8 percent. per year. Economists forecast that inflation in December will probably amount to over 8%, and in spring – even over 9%.

See also: Kaczyński spoke on inflation. “I curse myself in the shops”

Inflation forecasts for 2022 have been raised after URE approved higher-than-expected increases in energy prices. As a result, rate hikes may be faster and larger. And higher rates also mean higher loan installments.

In 2021, the head of the central bank, Adam Glapiński, repeated many times that the rise in prices in Poland was caused by external factors beyond the control of NBP, such as an increase in fuel or energy prices. However, core inflation excluding food and energy prices, which shows a price increase that is being influenced by the central bank, is also elevated. In November, it was 4.7 percent. per year.

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