Polish central bank increases gold reserves

Poland's central bank has announced that it has decided to increase its gold holdings to 20 percent of its official reserve assets, saying the move is aimed at bolstering the economy and ensuring financial stability.

Poland’s gold reserves have increased to 230.54 tonnes, from 228.6 tonnes two years earlier, the country’s central bank has said.

Photo: nbp.pl

Adam Glapiński, governor of the National Bank of Poland (NBP), told reporters on Thursday that the decision places Poland among the ranks of the world's wealthiest and most reliable nations in terms of financial security.

Glapiński said that such a level of gold reserves is characteristic of countries that are considered the safest and most credible.

He added that the decision also entails further gold purchases by the Polish central bank, underscoring the importance of gold reserves in maintaining the country's financial credibility, especially in the eyes of rating agencies and trade partners.

"We are solvent, trusted, and will remain so, even in the most challenging political, military, or other conditions," Glapiński said.

Będzie więcej złota w skarbcu NBP. Idziemy drogą krajów najbogatszych https://t.co/0eYipGADly

— Gospodarka - Polskie Radio (@Gospodarka_PRSA) February 8, 2024

The NBP's gold reserves were valued at EUR 21.7 billion as of January, showing a slight increase from December.

These reserves are stored in secure locations, including the Bank of England in London, the Federal Reserve in New York, and within Poland, with new purchases planned to be distributed similarly.

Inflation set to return to central bank's target

Glapiński also gave an optimistic outlook on inflation, projecting a return to the NBP's target rate of 2.5 percent (+/- 1 percent) within the first three months of the year.

He hailed the anticipated drop in inflation as a success for both the NBP and its monetary policy, despite acknowledging the uncertainty surrounding inflation rates in the latter half of the year due to potential fiscal and regulatory influences.

Polish zloty getting stronger

Additionally, the Polish central bank chief highlighted the strength of the Polish zloty currency, noting its significant appreciation and its impact on the economy.

A strong currency, according to Glapiński, aids in combating inflation but poses challenges for importers and the central bank's financial position.

He attributed the strong zloty to limited demand pressure and an increase in savings, reflecting a growing confidence in the national currency following an extended period of instability.

(rt/gs)

Source: IAR, PAP