The Commission for Banking Supervision, on the eve of the next meeting of the Monetary Policy Council, suggested to banks that when determining the creditworthiness of potential borrowers, they assume that interest rates may increase by 5%. Reference rate of 2.75% would then be 7.75 percent. What does this mean in practice for all those who are now paying off their debts – from credit card loans to several hundred thousand mortgage loans? For now, on Tuesday, March 8, 2022, the Monetary Policy Council raised interest rates by another 0.75 percent, but the interest rates on loans will be as high as 14 percent from tomorrow.
Breaking news. The Monetary Policy Council raised interest rates today, on March 8, by 0.75 percent. The reference rate, which is important for borrowers, has been at 3.5 percent since March 9, and the maximum interest rate on loans is 14 percent.
This is not the end, however. After the rate hike and a special conference of the NBP governor, who announced an increase in rates until the end of inflation, analysts began to treat the prospect of interest rates at the level of 5 percent. and even higher in the very near term as normal, not shocking. What does it mean? people planning to take out consumer loans in the near future must take into account the real possibility that in a few months they will pay them back at an interest rate well above 20 percent, or maybe even 30 percent. annually. This means that taking a certain amount of the loan for four years, you will have to return the amount borrowed during these 48 months, plus even 75% of it. as a sum of interest.
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This will make many people give up shopping on credit, weaken the demand, and this in turn will slow down the price growth, because in the absence of customers, traders will have to encourage them with price cuts. But this has its downside – a decline in demand means full warehouses and a production slowdown, i.e. a reversal of the upward trend in the economy; not controlled in time will lead to an increase in unemployment, a recession and even an economic crisis.
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