NBP president Adam Glapiński argued that reserve assets held by the central bank would help to counteract negative trends on the financial and currency markets.
The National Bank of Poland (NBP) has over EUR 140 billion in foreign currency reserves, nearly twice as much as 10 years ago, the bank’s president has written in a weekly magazine.
Writing in the ‘Wszystko co najwazniejsze’ (Everything that’s most important) opinion magazine, published by the New Media Institute Foundation, Adam Glapiński argued that reserve assets held by the central bank would help to counteract negative trends on the financial and currency markets.
The NBP governor pointed out that in the last 15 years, Poles have lived through two very serious global crises: the financial crisis of 2007-2012 and the coronavirus pandemic.
He added that “since not long ago we have been dealing with the dramatic socio-economic consequences of a geopolitical crisis caused by Russian aggression against Ukraine. And while the nature of each of these crises has been entirely different, in each case the central bank has been the guardian of macroeconomic stability.”
Glapiński said Poland could react rapidly and on a large scale because, due to a responsible fiscal policy, there was wide scope for increased public spending.
He went on to write that the central bank’s management of foreign currency reserves had helped them double in size over the last decade.
“That’s very important because reserve assets ensure the payment credibility of the Polish state, including indirectly of the private sector,” Glapiński explained, going on to state that in the years 2016-2020, the NBP had made profits, from which a total of PLN 32 billion (EUR 6.82 billion) was paid into the state budget.
He wrote that a central pillar of the national bank’s investment strategy was increasing its gold resources, which as a “safe haven asset” effectively diversifies the risk related to other investments, and pointed out that in 2018-2019 the NBP had bought 125 tonnes of gold, increasing its total holding to almost 230 tonnes and representing about 8 percent of the bank’s official reserve assets.
The central bank governor argued that macroeconomic stability and a large reserve portfolio had turned out to be priceless in the face of the current geopolitical crisis.
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