The Central Bank of Poland had the equivalent of $166 billion at its disposal at the end of 2021, six times more than in 2020 and almost doubled over the past decade, the National Bank of Poland (NBP) wrote in a statement on Thursday. .
The NBP said that Poland occupies a “high” position – 20th – in the ranking of countries with the largest foreign exchange reserves.
“The current amount of the NBP’s foreign exchange reserves, corresponding to almost 26% of Poland’s GDP, ensures the maintenance of an appropriate level of commonly used reserve adequacy ratios, primarily reflecting the potential needs of the balance payments in crisis situations,” the statement read.
Foreign exchange reserves, the NBP said, are readily available liquid foreign assets owned 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 main role of foreign exchange reserves is to strengthen the country’s solvency. 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 investors foreigners,” the NBP said.
According to the central bank, since 2000, the pace of NBP foreign exchange reserve accumulation 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 the reserves did not result from monetary interventions, but mainly from the positive balance of external flows, largely due to the influx of funds from the ‘European Union,’ the NBP said.
Citing data from the Ministry of Finance, the bank said the net value of EU fund inflows in 2004-2021 amounted to 143.4 billion euros ($178 billion).