What do the Polish know for its central bank to say they will limit the “geopolitical risk” of “losing access” to its gold?
From The Bank of Poland (bold added for emphasis, translation by Google)
The National Bank of Poland implemented strategic decisions of the NBP Management Board on a significant increase in gold reserves in foreign exchange reserves. In 2018-2019, the NBP gold resources were increased by 125.7 tons and currently amount to 228.6 tons. Almost half of the Polish gold will be brought into the country and will be stored in the NBP’s vaults.
The NBP currently has 228.6 tonnes of gold
This year, NBP resources have been fed with 100 tonnes of gold. 25.7 tons of gold was bought by the NBP in 2018. Thanks to the purchases made in the last 12 months, during the term of office of prof. Adam Glapiński, NBP shifted from 34th to 22nd among central banks in the world and from 15th to 11th place in Europe, ahead of all countries in the region.
The strategic decision of the National Bank of Poland
Gold is the “most reserve” of reserve assets: it diversifies the geopolitical risk and is a kind of anchor of trust, especially in times of tension and crises. In the case of Poland, however, it is an exceptionally good economic situation and a steady, strong increase in foreign exchange reserves (by over EUR 30 billion over the last five years) allowed to increase Polish gold resources, which will strengthen credibility and secure the financial strength of our country even in extremely unfavorable conditions .
There were also comparative reasons for the decision to buy gold. Poland so far occupied 21st place in the world in terms of foreign exchange reserves and 34th in terms of gold resources. Also, the share of gold in NBP foreign exchange reserves was below the average for all central banks (10.5%) and well below the average in European countries (20.5%). The purchase of gold allowed not only to increase the strategic buffer of the country’s financial security, but also to bring the NBP closer in terms of the share of gold in foreign exchange reserves to the average in central banks in the world (10.5 percent).
In what form the National Bank keeps gold
As a component of official reserve assets, NBP gold meets international standards of cleanliness and has the form of a London Good Delivery staff. The NBP gold in the Bank of England is maintained on the so-called allocated account , i.e. each bar assigned to the NBP account is uniquely identifiable, has a unique serial number and refiner mark. The highest quality of NBP gold and high standards of its storage were additionally confirmed during an inspection conducted by NBP employees in the Bank of England in June this year.
Polish gold returns home
The strategic nature of gold reserves requires long-term planning. Therefore, central banks usually strive to diversify the storage locations of their gold resources, also in order to limit geopolitical risk, which could result, for example, in losing access to or restriction of the availability of gold resources held abroad.
Due to a significant increase in our gold resources and taking into account the practice of other central banks, the NBP Management Board decided to transfer half of the current gold resources (around 100 tons) to the NBP vaults. The operation has already been communicated to our partners at the Bank of England and will be carried out in accordance with the schedule ensuring the security of this operation.
– I am proud and moved that during my term – in the year in which we celebrate the centenary of the Polish zloty as the foundation of our country’s economic strength – we managed to increase the strategic reserves of gold and take steps to repatriate a large part of Polish gold to the country. By implementing our constitutional, statutory and simply patriotic commitment, we not only build the economic strength of the Polish state, but also create reserves that will safeguard its financial security. This is the global trend, but also the expectation of Polish society – says prof. Adam Glapiński, president of the National Bank of Poland.