Poland Steps Up QE Program With Biggest Bond Buying Since July

Polish central bank has ramped up its quantitative-easing program, buying the most debt at a single auction since July in a bid to keep a lid on borrowing costs.

The purchases worth 3.75 billion zloty ($968 million) included 1.5 billion zloty of notes issued by state-run lender BGK and seven series of government bonds maturing from 2024 to 2030, according to auction results published on the National Bank of Poland’s page on Bloomberg.

The central bank said last week that it may increase the flexibility and frequency of its quantitative-easing auctions after the program slowed in recent months. Polish bonds have succumbed to a global debt sell-off this year and the zloty hit its weakest level in more than two months on Wednesday. The yield on the country’s benchmark 10-year note fell 1 basis point to 1.51%.

The European Union’s largest eastern economy is facing the prospect of a national lockdown after the number of new virus cases jumped the most since November. Renewed restrictions could delay the recovery and put in jeopardy the government’s ambitious economic growth target of 4% this year.

While the auction on Wednesday was the biggest since similar operation on July 8, it fell short of 10 billion zloty that the central bank had planned to buy.

©2021 Bloomberg L.P.

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