Interest rate cuts – who gains and who loses?

Interest rates have been cut in Poland – the main reference rate has fallen to 5.25%. For many, this may sound like something that only concerns bankers and analysts, but the truth is that these decisions affect each and every one of us – how much we pay for a loan, how much we earn on a deposit, and even how much fuel costs. That is why it is worth understanding how it all works.

Let's start with the basics - what are interest rates anyway?

This is a tool used by the central bank, in our case the NBP. By setting their level, the bank influences how much it costs to borrow money – and conversely, how much we can earn on this money, for example by keeping it on deposit.

And now – why lower or raise them? When the economy slows down and inflation starts to fall – as it is now – the central bank can lower rates to stimulate the market. What happens then? Money becomes cheaper. Credits are cheaper, installments fall, companies are more willing to invest, people are more willing to buy apartments, cars, equipment. In short – consumption and investment are driven. That is the goal: to stimulate economic growth.

On the other hand, when inflation is rampant and the economy overheats, the bank raises interest rates. Why? To cool the situation. More expensive credit means fewer purchases, fewer investments. People save more because deposits have better interest rates. And all of this has one goal - to limit inflation. It's an economic lever: you move it in one direction - you stimulate growth, in the other - you slow it down.

Returning to our situation – this May cut is the first serious signal that the NBP wants to loosen monetary policy. Inflation is falling, so rates may also slowly return to a more neutral level.

But what does this mean for us ordinary people?

First of all – lower loan installments. If someone has a mortgage, they can already see a few dozen złoty less in their monthly installment. And over the course of a year, that makes a difference. New borrowers can also count on better conditions, because banks are starting to look more leniently at creditworthiness.

Secondly, the possibilities of taking out loans are growing. For those planning to buy a flat or start a business, this may be a good time, because financing is simply cheaper.

Thirdly, not everything is rosy. Savers have it worse. Deposits and savings accounts with low interest rates are no longer profitable. This may encourage people to look for other forms of investment – for example, bonds, funds or the capital market.

And one more important thing – the złoty may weaken. Lower rates often mean a weaker currency. For exporters, this is good news – their goods are more competitive abroad. But for us, as consumers, it may mean more expensive fuel or electronics, because imports become more expensive.

So as you can see, interest rate decisions are not just data in Excel. They are real money in our pockets and specific changes in the economy. A cut can help many, but it can also create new challenges. For now, inflation is falling, so this direction seems logical. But what will happen next? It all depends on how the economy reacts. If inflation continues to fall, we may see further cuts this year. But that depends on many factors: global economic conditions, exchange rates, fiscal policy, geopolitical situation.