Narodowy Bank Polski

Statement

Art. 227 Item 1 of the Constitution of the Republic of Poland stipulates: "The National Bank of Poland shall be responsible for the value of Polish currency". This provision of the Constitution has been formulated in greater detail in the Act on the National Bank of Poland. Art. 3 Item 1 of the Act stipulates: "The basic objective of NBP activity shall be to maintain price stability, and it shall at the same time act in support of Government economic policies, insofar as this does not constrain pursuit of the basic objective of the NBP." Thus, the Act provides for attainment of other goals solely on the condition that they are not in contradiction with the primary, constitutional objective of the National Bank of Poland.

The National Bank of Poland has a limited set of tools at its disposal with which it can influence the economy. Its basic tool is the short-term interest rate. It enables the Bank to achieve only one goal, i.e., in compliance with the Constitution, maintain the price stability. Ensuring low inflation is the most important contribution that the central bank may have to long-term growth. Wealth and prosperity cannot be built on currency with no value. Acknowledgement of price stability as one of the fundamentals for sound, sustainable economic growth is an unquestionable canon of modern economics and economic policy.

Depriving the maintenance of price stability of its status as the basic objective of NBP activity and downgrading it to a level of importance equal to that of NBP's other goals is a fundamental change that would undermine the legal basis of the monetary policy focused at price stability. Such a change leaves the door open for exerting politically-based pressures on the central bank to ease its monetary policy, without consideration for the social price of such short-sighted policy in the long term, i.e. for the costs of increased inflation. The present definition of the objective of NBP activity coheres with care for long-term economic growth.

Depriving the maintenance of price stability of its status as the basic objective of NBP activity would also give rise to a threat that the political establishment in power at any period of time would try to blame the central bank for the consequences of its mistakes or lack of action. The National Bank of Poland, having only one significant instrument at its disposal, may - provided that its independence is guaranteed - give the general public only one significant fundamental for development, which is low inflation. However, long-term economic growth depends on, apart from price stability, other factors, such as the condition of public finances, the level of taxes, barriers to entrepreneurship and to the scope of free market, or the degree to which politics interferes in the economy. As follows from the research conducted, Poland's robust economic growth requires sound public finances, a lower and less complex tax system, removal of barriers to entrepreneurship that stem from red tape, bringing the manual steering of the economy to a halt, i.e. accomplishing the privatisation, as well as enhancing the quality and level of law enforcement. No central bank is capable of replacing the government and the parliament in conducting these reforms.

According to the above, depriving the maintenance of price stability of its status as the basic objective of NBP activity would pose a threat to long-term growth. Furthermore, such a change would be in contradiction to the Constitution, whose provisions explicitly specify the basic objective of the NBP. Depriving the maintenance of price stability of its status as the basic objective of NBP activity would not be compliant with the European Treaties either. Art. 2 of the Statute of the ESCB and the ECB, which is based on the Treaty establishing the European Community, imposes the obligation to maintain price stability on the central banks in the ESCB as their basic objective. At the same time, functional independence of the ESCB requires that the basic objective of a central bank that is a member of the system be stipulated explicitly and be of a character superior to its other objectives.



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NBP interest rates

Reference rate 6.75
Lombard rate 7.25
Deposit rate 6.25
Rediscount rate 6.80
Discount rate 6.85

Exchange rates

Table of 2023-02-02
1 EUR4.7079
1 USD4.2803
1 CHF4.7147
1 GBP5.2838
100 JPY3.3201

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Contact

Narodowy Bank Polski
Świętokrzyska 11/21
00-919 Warszawa
Poland

tel.:
+48 22 185 10 00
e-mail: listy@nbp.pl
ePUAP:/NBP/SkrytkaESP
NIP: 525-000-81-98
REGON: 000002223
SWIFT: NBPL PLPW
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