Poland’s Central Bank Says It Will Add 100 Tons of Gold to Existing Holdings in 2022
The Polish central bank, the National Bank of Poland (NBP), is reportedly planning to raise its gold reserves by 100 tons in 2022. According to bank governor Adam Glapinski, the objective of this decision is to prepare Poland for “the most unfavourable circumstances.”
Gold’s Safe Haven Status
In his remarks during an interview with the Gazeta Wroclawska newspaper, Glapinski explained why the NBP has chosen to increase its gold holdings. He said:
Why does the central bank own gold? Because gold will retain its value even when someone cuts off the power to the global financial system.
Glapinski adds that while the central bank is not assuming this will happen, it is still required to be prepared for such a scenario. The report also quotes the governor explaining why gold’s reputation (as an asset that increases in value during times of increased risk and financial and political crises) is such an important attribute for the NBP.
Gold as Hedge Against Dollar Fluctuations
Finally, according to the governor, gold is also seen as a good hedge against U.S. dollar fluctuations. Glapinski explained:
“Gold is characterized by a relatively low correlation with the main asset classes – especially the U.S. dollar dominating the NBP reserve portfolio – which means that including gold in the reserves reduces the financial risk in the process of investing in them.”
Meanwhile, the report reveals that the NBP is planning to acquire the gold in mid-2022 when Glapinski expects to be re-elected as governor.
Do you agree that the inclusion of gold in a reserve portfolio will reduce financial risk for the Polish central bank?
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Author: Terence Zimwara