NIK on FX reserve management by National Bank of Poland

In the audited period, there was nearly a two-fold increase of reserves (from EUR 44.1 billion to EUR 81.9 billion), which resulted in the strengthening of the credibility of Poland in the international arena. Most reserve adequacy ratios defined by the International Monetary Fund showed that they provided economic security of our country.

Execution of ratios defined by IMF


According to NIK inspectors, the National Bank of Poland managed the reserves based on the Long-term strategy for the management of the NBP foreign exchange reserves. In order to achieve its goals the central bank took effective efforts to increase the return upon ensuring adequate security of the reserves. These measures included among others extension of the currency basket, purchase of new, more profitable securities and improvement of the investment risk management.

The reserve management efficiency was regularly monitored by referring the return on reserves to the return on the benchmark portfolio. In most annual periods, the NBP posted positive efficiency ratios (except for 2011). In the whole period, the yield on reserve management totalled PLN 24.8 billion.

In the period of instability in the world financial markets, the NBP minimised the investment risk by limiting the circle of contracting parties to the most credible institutions and by shortening investment terms. For instance, investments in government securities of Ireland and Spain were completed in August 2010 and in March 2011 correspondingly, that is before the financial crisis intensified in those countries in the second half of 2011.

The reserve growth was mainly caused by the inflow of currencies from the EU funds. It resulted in an over seven-fold increase of excess liquidity of the banking sector in the period 2009-2013 (from PLN 18 billion to PLN 126.5 billion) and a nearly four-fold increase of the costs of its reduction by the NBP (from PLN 1.2 billion to PLN 3.8 billion). From 2012, these costs exceeded the result achieved through the FX reserve management. To minimise any adverse impact of excess liquidity on the monetary policy, NIK considers it justified to stabilise the level of FX reserves. At the same time, NIK has pointed out that the said consequences of the reserve increase are of secondary significance in comparison to the principal audit findings confirming security and stability of reserves as well as their adequacy to the economic situation in Poland.

From 2010, the NBP did not make any deposits in foreign exchange gold, giving up potential revenue estimated at about EUR 4.1 million. NIK submitted a post-audit recommendation to the NBP President to consider making the policy of FX gold deposits more flexible in the most credible financial institutions. The NBP President accepted the recommendation for execution. The NIK audit revealed that throughout the entire audit, as much as 95 percent of the FX gold  (98 tons) was stored in the Bank of England, which enabled making gold deposits and generating revenue from that (the remaining 5 percent of gold is stored in the NBP vaults).

Article informations

Date of creation:
04 April 2014 11:11
Date of publication:
04 April 2014 11:11
Published by:
Marta Połczyńska
Date of last change:
10 April 2014 10:57
Last modified by:
Marta Połczyńska
NIK on FX reserve management by National Bank of Poland © PhotoXpress

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