Polish c bank mulls making its debt tradable

POLAND - Poland's central bank may switch its untradable debt into tradable paper, Monetary Policy Council (MPC) member Wieslawa Ziolkowska said on Wednesday.
POLAND - Poland's central bank may switch its untradable debt into tradable paper, Monetary Policy Council (MPC) member Wieslawa Ziolkowska said on Wednesday.

In 1999 the central bank issued some 13 billion zlotys ($3.2 billion) of untradable inflation-linked bonds to mop up cash freed by a slashing of mandatory reserves for commercial banks.

"This operation would entail making this debt tradable and raising interest on the paper to market levels," Ziolkowska told a news conference following the MPC's 150 basis point rate cut.

"Thanks to this operation, the financial situation of the banks (which had to use cash from mandatory reserves for the untradable bonds) will improve," she said. Returns from the untradable paper fell along with inflation, she added.

It is not immediately clear what type of tradable paper the central bank plans to exchange for the inflation-linked bonds.

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