Prof. Adam Glapiński, Prezes NBP (Fot. NBP)
Central banking is typically associated with conducting monetary policy. But central banks have also other important roles, one of which is holding and managing foreign exchange reserves. Indeed, as stipulated in the Act on Narodowy Bank Polski – Poland’s central bank charter – the central bank holds and manages FX reserves as well as takes measures to ensure the safety of foreign exchange operations and Poland’s external payment liquidity. At the end of May 2021 official reserve assets of Narodowy Bank Polski (NBP) accounted for USD 162.7 billion, increasing in USD terms roughly six-fold from USD 27.5 billion in 2000 and almost doubling over the past decade.
In a monetary policy strategy based on a floating exchange rate regime – such as in Poland – the role of FX reserves is primarily to enhance the country’s financial credibility, thereby reducing the cost of financing in the global markets and the volatility of the złoty exchange rate, as well as to mitigate the risk of sudden capital outflows. Incidentally, FX reserves may also be used to support the stability of financial markets or the banking sector in the event of significant disturbances in their functioning. (…)