08.10.202112:45 Forex Analysis & Reviews: Poland plans to buy 100 tons of gold next year

The National Bank of Poland (NBP) is reportedly buying around 100 tons of gold next year. Chief Adam Glapinski said they will do so to prepare for the most unfavorable circumstances.

In an interview with a local newspaper, Glapinski disclosed that the bank wants to improve the country's financial stability. He explained that even if someone disconnects the power from the global financial system, gold will retain its value.

"Of course, we do not assume that this will happen," Glapinsky stressed. "But as the saying goes, forewarned is always insured. And the central bank is required to be prepared for even the most unfavorable circumstances. That is why we see a special place for gold in our foreign exchange management process. " "

The move is likely to take place in the middle of next year, when Glapinski is re-elected as governor.

The NBP chief also noted that they view gold as a safe haven asset, the value of which will rise in times of heightened risk, financial and political crises and other turmoil in world markets. It is also an excellent hedge against fluctuations in the US dollar.

Back in 2018 and 2019, the central bank bought 126 tons of gold to increase its reserves to 229 tons.

"The NBP had already increased its gold reserves by 100 tons the year before last and had announced further purchases in the coming years. Eastern European central banks are thus continuing to expand their gold reserves," said Commerzbank analyst Carsten Fritsch.