Poland’s central bank had at its disposal the equivalent of $166 billion at the end of 2021, up six-fold compared to 2020 and almost doubling over the last decade, the National Bank of Poland (NBP) wrote in a statement on April 28.
The NBP said that Poland held a “high” – 20th – position in the ranking of countries with the largest foreign exchange reserves.
“The current amount of the NBP foreign exchange reserves, corresponding to nearly 26% of Poland’s GDP, ensures the maintenance of an appropriate level of commonly used reserve adequacy ratios, reflecting above all the potential needs of the balance of payments in crisis situations,” the statement read.
Foreign exchange reserves, the NBP said, are easily disposable, liquid foreign assets held and managed by the central bank. They include assets denominated in foreign currencies, mainly in the form of securities, deposits, cash and gold.
“Currently, the primary role of foreign exchange reserves is to strengthen the country’s creditworthiness. The size of the reserves is taken into account in the assessment of macroeconomic and financial stability carried out by the International Monetary Fund, rating agencies and foreign investors,” the NBP said.
According to the central bank, since 2000, the pace of accumulation of NBP foreign exchange reserves has remained in line with the global trend. However, the main sources of this accumulation have been different from those typical of most emerging economies.
“In the case of Poland, the successive increase in the value of reserves resulted not from currency interventions, but primarily from the positive balance of external flows, largely due to the inflow of funds from the European Union,” the NBP said.
Citing data from the Ministry of Finance, the bank reported that the net value of EU fund inflows in 2004-2021 amounted to EUR 143.4 billion ($178 billion). (The First News/Business World Magazine)
