Today, the task of central banks is to prevent the increased inflation from becoming permanent and the NBP’s goal is also to lower it in the medium term to the inflation target – said the NBP president Adam Glapiński in an interview with Global Risk Regulator, a specialist service of the Financial Times.
“In the first phase of the pandemic, the main challenge for the economic authorities, including central banks, was to reduce the losses caused by the pandemic. Today, the main task is to prevent the elevated inflation from becoming persistent, especially in those countries that have already recovered from the pandemic losses. Poland has returned to the fast track. growth, and at the same time increased inflation. Our main goal for today is to bring inflation down to the level of the NBP’s inflation target in the medium term, “Glapiński said when asked about the main targets for a possible second term of office.
“I can make it clear that ensuring price stability, which today means ensuring that inflation returns to our MTO, is and will remain my main task as long as I remain central bank governor,” he added. As he emphasized, he is ready to continue to act as the president of the NBP, but the decision on this matter rests with President Andrzej Duda and the Sejm. He pointed out that in the current turbulent times, institutional continuity is very important and expressed the opinion that the NBP is fulfilling its tasks well – it ensures long-term price stability and protects Poland’s macroeconomic stability.
Adam Glapiński: The pandemic recession in Poland was relatively shallow
He pointed to a number of measures taken by the NBP just after the outbreak of the pandemic, which effectively supported the economy, in particular a strong easing of the monetary policy. He recalled that in 2020 the NBP took measures that strengthened the liquidity position of the banking sector and enabled it to continue lending activities. As he calculated, they included: lowering the required reserve ratio (from 3.5% to 0.5%), enabling banks to obtain liquidity through short-term repo operations, launching unconditional purchases of bonds issued and guaranteed by the Treasury on the secondary market under the structural framework open market operations, introducing a discount bill of exchange loan for refinancing corporate loans granted by banks, as well as extending the list of collaterals accepted in liquidity-increasing operations to include bonds guaranteed by the State Treasury.
“Thanks to these measures, the pandemic recession in Poland was relatively shallow and short-lived, and unemployment hardly increased and is still one of the lowest in the European Union” – he indicated. He added that Polish GDP is already 3 per cent in real terms. higher than before the pandemic, and the economy is growing at 5%. every year and everything indicates that it will continue to develop dynamically in the coming years. Adam Glapiński was also asked about the NBP’s support for the right to use cash and about the attitude towards the central bank’s digital currencies (CBDC). “Cash is still widely used, both in Poland and in many other countries. Citizens still want to use this form of money, which shows that eliminating cash would run counter to social expectations and the public interest. At the same time, we are fully aware of the important role of non-cash payments. in the modern world and we support their development, said the President of the National Bank of Poland. He stressed that the financial system, and in particular the central bank, must not discriminate against people preferring cash payments, and in particular, it must not exclude such people from economic circulation.