Since the introduction of direct inflationary targeting, the objective of the Polish monetary policy has been to curb the rate of growth of retail prices.

The frequent financial crises observed recently in the world economy, especially in the emerging markets, emphasise the significance of factors affecting a country's external payments equilibrium. Official reserves belong to the most central of those, since they guarantee a country's solvency and heavily affect its credit standing. They can be regarded as a tool supporting the implementation of inflation targets in the long term.

The paper presents the definitions of official reserves and their optimal level, along with the most important methods allowing to determine this level, as described in relevant literature.

While it is a complex task to identify the optimal level of official reserves for Poland, it is certain that this level should not fall. With a severely negative current account, a slump in foreign reserves might create a suspicion among the foreign investors that the Polish economy is moving out of equilibrium. This could result in an outflow of portfolio capital, with all the consequences involved. Having said that, it is necessary to add that merely preserving the current level of official reserves is not sufficient to prevent a deterioration in many of the safety indicators listed in the paper.