At the end of last week, a statement was released by the National Bank of Poland (NBP) which indicated that Poland’s reserve assets managed by the central bank denominated in euro have amounted to €125.6 billion (or $154.2 billion). Additionally, NBP is also managing its exchange reserves and takes care of maximizing their profitability, but the priority is their security and maintaining the crucial level of liquidity. Their majority is invested in government stock (over 70 percent), in international institutions, government agency stocks, and the remainder is maintained in the form of bank deposits as well as monetary gold.
In recent years, Poland’s gold reserves had dramatically increased, as the NBP has more than 229 tons of gold. Just at the end of 2015, the value of Poland’s reserve assets managed by the NBP denominated in euro amounted to €86.9 billion ($94.9 billion) compared to the recent sum of €125.6 billion. Therefore, over the course of five years, the value of reserve assets has increased by €38.8 billion ($59.3 billion) — a 50 percent increase in euro and more than 60 percent in US dollars. This is a massive growth in value of Polish reserve assets, which characterizes the actions of the management of the Polish Central Bank since Adam Glapiński became its head in June 2016.
The changes to the structure of Polish currency reserves gained traction after NBP statements concerning purchasing gold by the central bank and the later increase in price of gold on stock exchange markets, which earned the NBP additional profits. Just a few years ago, the gold stock in the NBP’s currency reserves fluctuated up to 100 tons, but these reserves then grew by almost 126 tons to 229 tons between 2018 and 2019. Summarily, NBP purchased close to 126 tons of gold for €4.4 billion , whereas the gold now is worth almost €5.75 billion. The aforementioned 229 tons of reserves in gold gathered by the NBP brings the Polish Central Bank closer to the average of other central banks in the world in terms of the share of gold in currency reserves, with the average standing at about 10 percent.
The NBP under Glapiński’s leadership has very strongly supported the government’s economic policy, especially during the pandemic which has caused a recession which was expressed by GDP decreases in the second and third quarters of 2020. The NBP significantly decreased interests rates, which led to the lowering of interests rates on loans for entrepreneurs and households. This in turn left about €1.55 billion in the pockets of borrowers. As Glapiński underlines, owing to the actions of the NBP, the darkest scenario for Poland’s economy was avoided and furthermore, compared to other EU economies, Poland’s outlook remains stable with real potential for further growth. According to the estimates of NBP analysts, the actions of the central bank have helped secure Poland’s economic position and estimate GDP growth of for Poland will grow by at least 1.4-percentage points between 2020 and 2021.
