NBP will gradually increase the exposure of FX reserves to stock markets

At the end of 2024, the share of joint -stock ETFs in the NBP foreign exchange reserves (excluding gold) increased to 5 percent. with 1.5 percent A year earlier, and the updated strategy for managing the FX Central Bank reserves assumes, among others Further gradual increase in exposure to stock markets – was given in the report on the activities of the NBP for last year.

“In 2024 a portfolio of the participation titles of investment funds (Exchange Traded Funds, ETF) was built, replicating shares indexes on the US markets, the euro area, Great Britain, Canada and Australia. At the end of the year it was 5 percent of foreign exchange reserves (excluding gold – PAP) The foreignness assumes, among others, a further increase in exposure to stock markets, “NBP says.

The NBP increased the share of government bonds in FX reserves (excluding gold) to 81.3 percent at the end of 2024. from 81.1 percent, reduced the share of non -governmental securities to 8.8 percent. from 13.2 percent, the deposits increased to 4.9 percent. from 4.3 percent, and joint eTfs up to 5.0 percent with 1.5 percent

The NBP invested in 2024 in the following ETFs: S&P 500 Total Return (USA), NASDAQ 100 (USA), Euro Stoxx 50 Net Return (euro zone), FTSE 100 NET TAX (Great Britain), S&P TSX CAPED Composite Total Return (Canada), S&P ASX 200 TOTAL RETURN and SOLACTIVE Australia 200 (Australia).

In 2024, the currency structure and Modified Duration of NBP reserves did not change significantly compared to the previous year and amounted to: 42 percent. USD, 20 percent EUR, 12 percent GBP, 10 percent CAD, 8 percent Aud, 5 percent NOK and 3 percent NZD. Modified Duration was 3.2.

Modified Duration is a measure of the risk of interest rates, determining the sensitivity of the value of investment portfolios to changes in the profitability of financial instruments. At the same time, he approximately corresponds to the average incidence of cash flows related to debt instruments.

In 2024, the rate of return on investing foreign reserves calculated in the currency of instruments amounted to 3.7 percent. In the present 4.7 percent. a year earlier. In this case, the rate of return on foreign currency reserves in the currency of individual investment portfolios is calculated on the basis of daily changes in the market value of instruments (without taking into account the impact of changes in exchange rates).

The rate of return on foreign exchange reserves, taking into account the impact of changes in exchange rates in 2024, was 4.2 percent. against -4.8 percent a year earlier. (PAP Biznes)

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