President of the National Bank of Poland Adam Glapiński announced on Thursday that currently, 25 percent of all NBP reserves consist of gold, totaling 520 tons and valued at over PLN 240 billion. He declared that NBP will continue to purchase the precious metal.
“I inform you that the Management Board of the National Bank of Poland has accepted my proposal and made a strategic decision to increase gold reserves, raising the share of gold in our reserve assets to 30 percent,” said Glapiński during Thursday’s press conference.
As he explained, NBP now holds over 520 tons of gold. “At present, it is worth around PLN 240 billion, and the price of gold keeps rising. It currently accounts for 25 percent of all our reserves. That’s a respectable indicator,” said the NBP president.
He added that in terms of gold holdings, Poland’s central bank surpasses the European Central Bank and the Bank of England, as well as “a whole range of other renowned banks.”
“At present, we rank 12th among central banks worldwide, and we will continue to purchase gold,” Glapiński declared.
He assessed that gold serves as “a national security anchor, a pillar of confidence in our currency and economy, and a guarantee of state and economic independence.“
“Our three fundamental principles are, of course, security, liquidity, and long-term profitability,” he emphasized.
He also pointed out that the core part of NBP’s reserves is held in U.S. Treasury bonds. “The dollar is the world’s currency – the currency of our Western world. Naturally, we accumulate dollars, but we are increasing the share of gold. That’s exactly what all major central banks are doing,” he stressed.
“Lowering Poland’s rating outlook is a warning signal”
The NBP president also referred to recent concerning reports about the lowering of Poland’s credit rating outlook.
“Of course, we were concerned about this downgrade in outlook, because it means that within a year, there could also be a downgrade of the rating itself,” said Glapiński.
However, the NBP head emphasized that the agency’s decision did not affect the performance of Polish bonds. “We were pleased to observe that there was no change in yields. Investors didn’t react, because they see the very strong fundamentals of the Polish economy,” he noted.
According to Glapiński, the signal sent by the rating agencies should be treated as a warning. “It’s like a red light they’ve switched on for us to be careful. They’ve wagged a finger at us, and now they’re watching which direction we’ll go,” he said.
The NBP president assessed that Poland is “on the edge,” and in the near future it will be crucial whether the government takes steps to reduce the deficit and public debt. “It’s impossible to eliminate the deficit entirely, but what matters is whether we make efforts to reduce it, or whether we continue to borrow,” he stated. He added that decisions in this regard belong to the parliament and the government, not the central bank.