MPC: Poland will likely see further decline in bank sector overliquidity in 2016

Poland will likely continue to cut overliquidity in its banking sector in 2016, albeit perhaps at a slower rate than seen since the process began in 2014, the Monetary Policy Council said its annual policy review.

“The process seen since the beginning of 2014 for a decline in overliquidity in the banking sector is expected to continue in 2016, although the process could slow,” authors claim.

The rise in cash in circulation and size of the bank deposits which define mandatory reserves will work to undercut excess liquidity, offset only by whatever government FX deals go through the central bank net.

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