In 1989 Polish zloty was an inconvertible currency of entirely domestic use. Yet the Polish foreign exchange system was at that time and in the whole period o 1945-1989 the most liberal one among all post-communist countries (with the exception for former Yugoslavia).

In 1990-1999 the Polish foreign exchange system had undergone a fundamental liberalization. Its functioning and terminology were radically changed. At the same time the Polish zloty went through the following transformation steps: internal convertibility (January 1990), convertibility according to the IMF standards (June 1995) and finally convertibility very close to the OECD requirements (the period from January 1996 to February 1997 and January 1999).

The most significant changes bringing liberalization to the Polish foreign exchange system were introduced, however, not in four but in three critical moments: January 1990, January 1996 - February 1997 and January 1999.

As a result, as from the beginning of 1999 currency restrictions in Poland have been applied only to short-term capital transactions, i.e. transactions of maturity less than one year (and not all of them, but 75% of the whole number). Current account transactions and capital transactions with more than one year of maturity are free from restrictions.

Despite this significant progress in abolishing foreign exchange restrictions in the 90-ties, Poland is at the moment lagging behind the group of the most advanced in foreign exchange liberalization post-communist countries like Latvia, Estonia, Lithuania, the Czech Republic and Slovenia. The reason is simple: the liberalization process in those countries has been done at a faster pace.

One of the features of the evolution of Polish foreign exchange system in the 90-ties was the lack of a clear operational strategy till the beginning of 1996 and also the uneven pace of liberalization steps.

It is very likely that the existing restrictions referring to the short -term capital transactions, which should have been abolished by January 1, 2000 according to the agreement of 1996 between Poland and the OECD, will be gradually abolished in the period of 2000-2002.