NBP press release on the legal conditions and objectives
of the purchase of securities by NBP
Pursuant to Art. 123 of the Treaty on the Functioning of the European Union, overdraft facilities or any other type of credit facility with the European Central Bank or with the central banks of the Member States (hereinafter referred to as “national central banks”) in favour of Union institutions, bodies, offices or agencies, central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of Member States shall be prohibited, as shall the purchase directly from them by the European Central Bank or national central banks of debt instruments. Pursuant to Art. 48 of the Act on NBP, NBP may sell and purchase debt securities under open market operations. The above-mentioned legal conditions rule out the purchase by NBP of securities issued by public entities in the primary market.
The rules that guide NBP when purchasing debt securities arise from the regulations governing the conduct of open market operations, including those contained in the “Monetary Policy Guidelines for 2020”. In the “Press release from the meeting of the Monetary Policy Council held on 8 April 2020”, the Monetary Policy Council informed that NBP will purchase government securities and government-guaranteed debt securities in the secondary market as part of the structural operations. The aim of these operations is to change the long-term liquidity structure in the banking sector, ensure liquidity in the secondary securities market and strengthen the impact of the NBP interest rate cuts on the economy, i.e. strengthen the monetary policy transmission mechanism.