Bond supply under the microscope of the Ministry of Finance. Domański: The situation is very changeable
2026-03-13 09:00, updated 2026-03-13 09:16
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2026-03-13 09:00
update
2026-03-13 09:16
The Ministry of Finance will adjust the supply of bonds to market conditions – said Andrzej Domański, Minister of Finance and Economy, on Program I of Polish Radio. In the background there is, among others, presidential veto on the EU SAFE program and discussion on the sources of financing for the modernization of the Polish army.
We have a large liquidity buffer of approximately PLN 180 billion as of today, we are closely monitoring the situation on the markets and we adjust the supply of bonds to market conditions, and they are very volatile – said Minister Domański.
However, the main topic of the conversation was the presidential veto regarding the EU SAFE program. The government has repeatedly announced plan B in such a situation. Minister of Finance and Economy Andrzej Domański was asked on Friday on the First Program of Polish Radio whether the planned expenditure under the SAFE program will be implemented despite President Karol Nawrocki's veto of the bill implementing this program.
– The government will take action to ensure that all expenses planned in the SAFE program are implemented – Domański pointed out.
He emphasized that the government would certainly have a “decisive response” to what Domański called the president's veto, “very unnecessary and very bad for Poland.” – The government will take decisive actions to use the cheapest source of financing for the modernization of the Polish army, which is the SAFE program – assured the minister.
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Domański also stated that, in his opinion, the presidential veto of the SAFE program is a “betrayal of national interests.” – This is an action that makes it difficult to modernize the Polish army in the geopolitical situation we are currently facing – he said.
The regulations vetoed by the president assumed the creation of a Financial Security Enhancement Instrument managed by Bank Gospodarstwa Krajowego, through which the government could use money from SAFE – the EU instrument for low-interest loans to quickly increase the defense of EU countries.
The Polish application submitted to the program amounted to EUR 43.7 billion and was approved by EU institutions. Thus, Poland was indicated as the largest beneficiary of the program. According to the government's declaration, 89 percent these funds were to go to Polish arms companies.
Poles are eager to buy bonds again. These were the ones they chose most often
In February, the value of sales of savings bonds amounted to PLN 6.13 billion, the Ministry of Finance announced in a statement on Wednesday. The best sellers were 3-year fixed-rate bonds and one-year floating-coupon securities.
In the context of bonds, however, it is worth recalling that in recent days, Polish bonds have not proven to be a safe haven. Yields continue to rise, from levels below 5% in February to around 5.675 on Friday morning.
Global bond markets also under pressure
It is also worth noting that the yields of treasury bonds are rising all over the world, which is related to the conflict in the Middle East. “In the case of 10-year German bonds, we are approaching the level of 3.0%, i.e. to the long-term maximums of 2023 and 2024, while 10-year US bonds, being at 4.26%, did not even reach the local peak from the beginning of the year, and let us remind you that the peaks of 2023 were set at around 5.0% – Michał Krajczewski from the Brokerage House enumerates in the morning bulletin BNP Paribas Bank Polska.
The sell-off in global stocks and bonds shows no sign of letting up. U.S. stocks are falling and the yield on two-year Treasury bonds, which typically moves in line with the Fed's interest rate expectations, hit a six-month high on Thursday.
José Torres, senior economist at Interactive Brokers, said the impact of rising oil prices on corporate margins, inflation expectations, the prospects for interest rate cuts and bond yields is creating volatility, leaving participants with few places to hide.
“Indeed, declining optimism about Fed rate cuts amid rising cost pressures is weighing on traditional safe havens such as silver, gold and government bonds,” said José Torres.
Trump presses Powell on rates
Military operations in the Middle East drive up oil prices. On Thursday evening, US President Donald Trump again demanded that Federal Reserve Chairman Jerome Powell lower interest rates.
“He should cut interest rates immediately,” Trump wrote in a post on Truth Social.
As Reuters notes, interest rate futures, which before the outbreak of the conflict realistically priced in two cuts of a quarter of a percentage point, now barely account for one. And this despite market expectations that Kevin Warsh, whom Trump chose to succeed Powell, is more favorable to Federal Reserve rate cuts.
Prepared by JM/PAP
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