Abstract
Central banks analyze financial markets, because the initial impulses of the monetary policy go through them, before they reach the real economy. The effectiveness of monetary policy depends, to a large extent, on the degree of the development of financial markets. Financial markets have been developing in Poland since the beginning of the 1990. The first to develop was the inter-bank deposit market, which enabled banks to manage their liquidity. The next to develop was the Treasury bill market, which enabled the government to fund budget deficits. The introduction of partial convertibility of the zloty resulted in the emergence of the foreign exchange market in the early 1990. The stock exchange was developing simultaneously with the inter-bank markets, mainly as a result of privatization. The introduction of the trading band for the Polish zloty was a stimulus for the emergence of the forward foreign exchange market, which enabled hedging against the exchange rate risk. Gradually, the foreign exchange options market developed.
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