Polish Central Banker Tied to Ruling Party Nominated as Governor

  • Glapinski picked for 6-year term by president to replace Belka
  • Poland in throes of institututional crisis under new cabinet

Adam Glapinski, a member of Poland’s Monetary Policy Council for the past six years, was named to head the central bank, as authorities look to placate markets rattled by political divisions tearing at the European Union’s biggest eastern economy.

President Andrzej Duda said he’d submit his motion to replace Governor Marek Belka, whose six-year term expires June 11, according to a statement on Friday. Glapinski is a member of the central bank’s management board after leaving the policy council in February. Speaking after an interest-rate decision the same day, Belka endorsed the candidate.

Adam Glapinski

Source: Narodowy Bank Polski

Glapinski, long mentioned as a leading contender for the job, is the first internal pick to head the National Bank of Poland in the country’s modern history. He’ll take the reins of a $545 billion economy with the nation gripped by its biggest institutional crisis since the fall of communism more than a quarter century ago. The choice reflects efforts by the ruling party to restore a measure of calm to Polish markets as the country braces for a credit review by Moody’s Investors Service next week after an unexpected downgrade by S&P Global Markets in January.

“This is a good choice and that’s the way the markets took the news,” Belka told reporters. “He clearly participated in creating our monetary policy, the way it’s been. It seems obvious that there will some continuation of that good policy as both of us see it after those years of close cooperation.”

Market Backlash

Polish assets have suffered since S&P’s downgrade, which cited concern new government policies were eroding the independence of key institutions, including the constitutional court, central bank and public media.

The zloty fell the most in emerging markets on Thursday and bonds declined after the finance minister confirmed he asked the country’s top court to refrain from making comments about its conflict with the government that could influence the decision by Moody’s. The Polish currency traded 0.6 percent weaker at 4.4308 against the euro as of 5:47 p.m. in Warsaw.

The president expects Glapinski to ensure zloty stability, Duda’s spokesman Marek Magierowski told reporters in Warsaw on Friday. Finance Minister Pawel Szalamacha said he’s convinced that cooperation with Glapinski will be “harmonious,” adding that he awaits the nominee’s vision as the next governor.

The 66-year-old economics professor, together with Jaroslaw Kaczynski, co-founded the Center Alliance, which in 2001 was transformed into Law & Justice, a party that swept to power in 2015.

The appointment of a new governor would complete a transition that saw the replacement of all but two rate setters on the 10-member policy council this year. Each was named either by the ruling party or Duda. Law & Justice raised concerns about the central bank’s independence with a pledge before the nomination process to pick policy makers who’ll favor more monetary easing to spur growth and allow Poland to reduce unemployment and boost wages.

“It’s a smooth takeover that won’t disturb the bank and monetary policy,” Jaroslaw Janecki, the chief economist at Societe Generale SA’s Polish unit, said by phone Friday.

Rate Pause

Those concerns have subsided as the central bank extended its rate pause to more than a year, keeping the benchmark interest rate at a record-low 1.5 percent. It left borrowing costs unchanged for a 14th month in Warsaw on Friday. After the announcement of Duda’s pick, Nomura Holdings Plc said it’s maintaining its forecasts for rates to remain on hold until a “slow hiking cycle” starts in July 2017.

“We view Adam Glapinski as a soft hawk, a sensible moderate, who largely believes in the status quo of the existing monetary-policy framework and who will protect the independence of the central bank,” said Peter Attard Montalto, a senior emerging-markets economist and strategist at Nomura. “More broadly, we see him as likely a better, simpler communicator than current President Belka.”


While Duda’s candidate has strong ties to the ruling party, he’s spoken out in defense of the central bank’s independence, saying it’s “deep-rooted” and won’t buckle under political pressure.

Under Polish law, a candidate chosen by the president must win approval in parliament, where Law & Justice, a party allied with Duda, commands a majority.

Since the collapse of communism in 1989, Glapinski served as construction minister and was twice elected as lawmaker. He also held several posts in business, including in 2007-2008 as the chief executive officer of Polkomtel SA, the second-largest mobile company at the time.

The government has moderated its rhetoric, saying it has no intention of changing the central bank’s main mandate of ensuring price stability by targeting inflation. Deputy Prime Minister Mateusz Morawiecki, who oversees Polish economic policy, said that the central bank could use “new policy tools” even as he saw no need for extraordinary actions to stimulate lending.

“The central bank should have instruments similar to those in mature economies,” Morawiecki told Dziennik Gazeta Prawna in an interview published on Friday. “Its independence is indisputable, but its policy tools could be more up-to-date.”

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