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Polish Loan Costs Surge Testing Central Bank Appetite for Hikes

POLAND
  • The cost of financing for Polish companies and individuals is rising faster than interest rates, challenging the resilience of borrowers and the central bank’s willingness to tighten monetary policy further
  • The spread between the three-month Warsaw Interbank Offered Rate, which is the benchmark for most loans in Poland, and the central bank’s interest rate jumped to 122 basis points on Wednesday, the highest level since 2001. The central bank is due to decide on rates on April 6.
  • Unlike banking sectors in other European nations, Poland’s relies predominantly on floating-rate loans. They immediately pass on changes in borrowing costs to clients, as opposed to fixed-rate agreements which allow creditors to lock in servicing costs. Some clients are also starting to question the legality of using Wibor rates in their loan contracts. - bbg
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com

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