President of the National Bank of Poland, Adam Glapiński, announced that he had asked the board of the central bank for permission to buy another 100 tons of gold as reserves.
As Glapiński stated during his speech at Congress 590 in Warsaw, his intention is for gold to constitute 10 percent of the total. NBP foreign exchange reserves. Therefore, he said, as the value of these reserves increases, further gold purchases should take place.
According to information provided in July by the National Bank of Poland, the central bank increased its gold holdings to 7.452 million ounces in June.
As Glapiński argued, “the characteristics of gold make this ore fit very well in the prudential function of maintaining foreign exchange reserves and accumulating capital in the long term”.
“The NBP considers gold to be a particularly important element of its official reserve assets” – one could read in the article by the NBP president Adam Glapiński “Long-term investment: gold as a pillar of the NBP’s reserve management strategy”, which was published in the Capital Finance International magazine.
“The characteristics of gold make this gold fit very well in the prudential function of maintaining foreign exchange reserves and accumulating capital in the long term, withstanding periods of stress and dealing with volatile market conditions,” wrote the head of the central bank.
Glapiński pointed out that NBP, as a public investor, differs from a typical asset manager in that it maintains a wide investment portfolio, paying the greatest attention not to profit maximization, but to maintaining liquidity and security of its assets.
The president added that despite the recent purchase of significant gold resources, the NBP has not said the last word on this matter.
“The strategy of managing foreign exchange reserves adopted by the Management Board of the National Bank of Poland in 2020 assumes a further increase in gold resources, and the scale and pace of this process will depend on the dynamics of official reserve assets and market conditions,” wrote Glapiński.
The President of the National Bank of Poland recalled that as a result of purchases of 125.7 tons of gold in 2018-2019, the gold stocks at NBP increased to 228.7 tons. In the ranking of the size of gold resources, Poland moved from 34th to 22nd place among central banks in the world and from 15th to 11th place in Europe, ahead of all countries in the region.
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