Naturally, observers’ attention is currently focused on the interest rate cut by the Monetary Policy Council (RPP), as well as on the new involvement of the President of the National Bank of Poland (NBP) in defense-related issues. The latter could also have tangible implications for staffing and, consequently, for the legal and institutional situation within the central bank’s management board. For this reason, the consequences of Professor Adam Glapiński’s public statements in recent days may be greater than they appear at first glance.
A Golden Performance
Yesterday’s press conference by the NBP President provided quite a number of striking moments, recalling some of Professor Adam Glapiński’s most memorable public appearances. However, much has already been written about the event itself, the RPP decision to cut interest rates by 25 basis points, and the still somewhat unclear proposal to finance Polish defense spending with the involvement of the NBP.
Therefore, it may be worth focusing on another aspect—so far largely overlooked in public debate—on which the central bank governor’s new political engagement (it is difficult to call it otherwise) could have a direct impact.
Without a Right Hand?
In just two days, the six-year term of Marta Kightley, First Deputy President of the NBP, will come to an end. To describe her merely as Professor Glapiński’s right hand would be a significant understatement. It is an open secret that Vice President Kightley is largely responsible for the day-to-day management of the bank’s operations, while her superior plays a role more comparable to that of a chair of a supervisory board.
For this reason, it seemed obvious that the NBP President would want to appoint his deputy for a second term. The relevant document was submitted in recent days to the Chancellery of the President of Poland, since it is the President who appoints members of the NBP management board upon the request of the central bank governor.
However, this is where difficulties for Glapiński begin. Although the President formally appoints members of the board, the procedure also requires the countersignature of the Prime Minister. In this case, the head of government is not bound by any deadlines, and in practice no one can compel him to provide such a signature. If the countersignature is withheld, the position on the NBP management board will simply remain vacant.
A Central Bank Without a Management Board?
One vacancy alone might not seem like a major issue—although the absence of Marta Kightley would not be easy to replace, especially since internal conflicts have already led Adam Glapiński to strip oversight of departments from as many as four members of the management board.
However, the situation may soon become more serious. In March, the term of another board member, Piotr Pogonowski, will expire. In November, the term of Adam Lipiński will also come to an end.
If by that time Prime Minister Donald Tusk does not countersign at least one nomination for a new board member, the NBP management board could lose its formal legal basis to continue operating. The NBP Act clearly states that the board must consist of the President and between six and eight members.
Although Poland has somewhat grown accustomed to key institutions operating in a state of legal uncertainty—such as the Constitutional Tribunal—the paralysis of a central bank could have consequences that are difficult to imagine. Fundamentally, it would undermine the confidence of global financial markets in the country.
A Compromise at Risk?
According to media reports, all parties were aware of the risks associated with failing to reach an agreement. In recent months, productive negotiations had reportedly been taking place, and the warming of relations between the NBP and the Ministry of Finance was clearly visible.
The plan was reportedly to first approve the reappointment of Marta Kightley as the central bank governor’s nominee. After that, the Prime Minister would nominate his own candidate, and the final vacancy later in the year would be filled by a candidate designated by the President.
In this context, Wednesday’s joint appearance by Adam Glapiński and Karol Nawrocki became particularly significant. The event sounded like a political challenge directed at the government regarding the SAFE program.
That single political move may have undermined months of quiet negotiations, which had been aimed at maintaining the institutional stability of the National Bank of Poland. Of course, there is still time for all sides to reach an agreement. However, the NBP President’s renewed alignment with one side of the political dispute could make achieving a swift compromise considerably more difficult.
Observers will undoubtedly continue to monitor how the situation develops.
Friday Trading Ahead of the Weekend
By late Friday morning, financial markets were gradually preparing for the weekend break in trading. Investors were mainly focused on reducing risk exposure amid the ongoing war in the Middle East.
Oil prices have returned to sharp increases, and during Friday’s trading session the U.S. benchmark WTI has been rising twice as fast as London’s Brent crude. This may be an interesting consequence of the U.S. government’s announcement of a potential intervention in the oil futures market, aimed at limiting further price spikes.
Nevertheless, the prospect of oil reaching USD 100 per barrel appears increasingly plausible.
Asian markets delivered mixed signals. Stock exchanges in Mumbai and Sydney were under pressure, while Tokyo and Hong Kong performed well or even strongly. European trading began positively, but sentiment gradually deteriorated during the session, and by midday red dominated the markets.
The Warsaw Stock Exchange followed the trend of major markets, with the WIG20 index losing nearly 0.8%.
In the currency market, a classic risk-off flow toward the U.S. dollar was visible. The EUR/USD exchange rate tested the area around USD 1.158, whose breakdown could open the way toward autumn lows below USD 1.15.
Such a market environment typically puts pressure on the Polish złoty. The USD/PLN exchange rate is again attempting to rise above 3.70, the EUR/PLN rate has reached around 4.28, and the CHF/PLN rate is approaching 4.73.
Source:
https://ceo.com.pl/nowa-faza-rozgrywki-o-zarzad-nbp-80174
