During the Thursday press conference, the president of the National Bank of Poland, Adam Glapiński, commented on the reports of mass reprints of money by the NBP. Although, as Glapiński said, he was not used to using surnames, this time he did. He stated that “his hands drop” when the Speaker of the Senate Tomasz Grodzki “says that it is clearly visible how the NBP prints money, because it goes to an ATM, and there are fresh banknotes, still fragrant”.
Lots of people have kept it up and I can see it is circulating on the internet. That the NBP prints money and throws more and more new money, fresh banknotes, higher and higher denominations. What can you explain here? It’s like explaining to a child in the yard. It is impossible to explain the functioning of central banking, the nature of modern money, etc.
– said Glapiński. He explained that the banknotes in the physical sense are changed all the time, otherwise “the most commonly used ones would be rags that could not be read at all”.
We constantly take care of the physical quality of banknotes, we change the composition of the material from which they are made. But we don’t literally print money and we don’t put it in banks and ATMs. You do not need a lot of knowledge here, it is enough to read Wikipedia for ten minutes. We do not print extra money, we do not create extra money. We launched quantitative easing in a certain golden amount, used it in accordance with the law, and nothing else
– explained the president of the NBP.
The NBP “prints”, but not the banknotes
The quantitative easing mentioned by Glapiński was the purchase of Treasury bonds and securities guaranteed by the Treasury from the secondary market (from commercial banks) initiated by the NBP after the outbreak of the pandemic. As PAP Biznes calculated a few days ago, so far the NBP has purchased bonds with a total nominal value of over PLN 141 billion – PLN 81 billion of government bonds, PLN 40 billion of BGK bonds and nearly PLN 20 billion of PFR bonds.
To simplify it, it can be said that the NBP “reprinted” (“created”) this money in order to increase liquidity in the banking sector and that it would not be afraid of buying bonds of the State Treasury, BGK and PFR. Bonds issued to raise funds to stimulate the economy in crisis.
As for the increase in the amount of cash in circulation (i.e. new, fresh banknotes), it was caused, among others, by an increase in Poles’ demand for it, to which the NBP has to respond. The increase in demand for cash resulted in 2020 – especially during the lockdown periods – incl. for prudential reasons. At that time, Poles stood in lines at ATMs, because they preferred to have more cash at their homes.
Probably, as interest rates fell almost to zero – and thus also the interest rates on bank deposits – some people lost their incentive to keep savings in banks, thus generating a demand for cash.
As explained by the NBP in 2020, in response to the questions wp.pl (and, inter alia, in relation to the entry on Twitter by Senator Stanisław Gawłowski, concerned about the fact that he “once again” selects banknotes “newly printed with consecutive numbers” from the ATM), it happens that packages of new banknotes delivered by the NBP to ATM operators, of the same series and with consecutive numbers are immediately placed by them in the machine cassettes. For this reason, customers get new, numbered consecutively, fifty, hundreds or two hundred.
A person making a withdrawal from an ATM or at a bank’s cash desk may receive several consecutive banknotes. The receipt of new banknotes by the customer is not an exceptional event and results mainly from the actions of the National Bank of Poland aimed at maintaining the highest quality of banknotes in circulation
– answered the question from wp.pl by the NBP press office.
“If the NBP board ruled the world, it would be much better”
During the Thursday press conference, the President of the National Bank of Poland, Adam Glapiński, also said once again that the current inflation in Poland is temporary and is mainly due to factors beyond the control of the NBP or the Monetary Policy Council.
We do not have any tools to counteract the increase in the prices of electricity, fuels, raw materials and world freight. If we had, we would have used them immediately. But that would have to rule the whole world. I’m not saying the world wouldn’t be any better then. I assure you that if the Management Board of the NBP and the Monetary Policy Council were to manage the world, we would live in a much better world
– commented Glapiński. He also maintained his position that he is opposed to interest rate hikes at the moment. In fact, people who encouraged such a movement were accused of “lack of reason or bad will”.
Those who encourage a rate hike urge us to stagflation. I don’t know where these ideas come from. I cannot imagine that someone who, for example, graduated from the Warsaw School of Economics, would say such nonsense. Criticizing everything in it, it can only be a lack of reason or bad will
– said the president of the NBP.