Taper won’t hurt us: Poland’s central bank

Catherine Boyle and Geoff Cutmore, reporting from Warsaw
Tapering will not hit Poland as hard as other EMs: NBP's Belka

As the debate over when the U.S. Federal Reserve will start cutting back its asset purchasing program continues, one European country is hoping to avoid the potentially negative effects of the so-called taper.

"Poland wasn't a big beneficiary of quantitative easing, so tapering will not affect Poland as much as some other emerging markets," Marek Belka, head of the National Bank of Poland, told CNBC.

Funds flowed out of emerging markets between May and September, when many in the markets believed the Fed was going to announce a taper soon. Since then, there has been more differentiation between the different emerging markets, with Poland one of the better performers, according to David Bloom, head of foreign exchange strategy at HSBC.

(Read more: Emerging market currencies the Fed can't touch)

The Polish central bank, which has kept interest rates relatively low but has not used any of the unconventional monetary policies pursued by the bigger central banks, like asset purchases or cheap loans, still has plenty of room for maneuver, according to Belka.

"If the world falls apart, we still have a lot of powder in our war chest," he said. "We are pursuing a conventional monetary policy. If the economy allows us to keep monetary policy on the conventional path, this is much simpler than our colleagues in other countries."

(Read more: Poland: Still a tough sell for investors?)

Poland's inflation and gross domestic product growth (GDP) have slowed in recent years, and unemployment stands at around 13 percent. Inflation is targeted at between 1.5-3.5 percent, but fell to 1 percent in September.

The country is heavily dependent on the euro zone and particularly neighbor Germany for its exports.

Mario Draghi comments 'positive'

On Thursday, Mario Draghi, head of the European Central Bank (ECB), tried to dampen expectations that the euro zone's central bank may move adopt negative deposit rates soon.

"I'm not sure what is being discussed minus the .1 percent deposit rate would change the situation so much. Will it induce bank credit? Probably not very much," Belka said. What the European Central Bank can do is probably try, with some success, try to weaken the euro, which is not without merit for some countries in the Eurozone. What is much more important but it will necessarily take more time, is the cleaning and and strengthening of the European banking sector."

(Read more: Can emerging Europe's central banks fight the Fed?)

German exports account for around 10 percent of Poland's GDP.

"If Germany moves 1 percent (in GDP growth) per year, it's almost guaranteed that we will move three percent. If this gradual recovery stalls, it's not good news for us," Belka said. The Polish central bank believes that inflation will gradually start creeping up.

The strength of the Polish labor market is difficult to measure because of concerns about the size of the shadow economy and structural unemployment, said University of Columbia- and LSE-educated Belka, who noted that even at the height of the economic boom, Polish unemployment stood at 9 percent.

This week, Polish Prime Minister Donald Tusk surprised markets with the appointment of Mateusz Szczurek, a relatively unknown economist with no political experience, as his new Finance Minister, replacing veteran Jacek Rostowski.

Belka, himself a former Prime Minister and Finance Minister of Poland, pointed out that the Polish finance minister was more often a technocrat than a politician – and said that Szczurek was intellectually suited to the job.

- By CNBC's Catherine Boyle. Twitter:@cboylecnbc.