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Poland

Europe-Polish Zloty (PLN) to be fully convertible by the year 2000

As of January 1 2000, according the time-table for the harmonization of Polish law with OECD regulations, Poles will be able to hold funds in bank accounts abroad. If the schedule is adhered to, it will result in the full liberalization of short-term money and capital transfers, making the Polish Zloty fully convertible.

Poland has undertaken to liberalize all currency restrictions by January 2000. However, until now the Polish government has not prepared any drafts of legal acts necessary to implement this liberalization. According the Polish Ministry of Finance, the schedule will be adhered to. Should Poland wish to change the timetable, it would have to present significant reasons for making full liberalization difficult to implement.

The Zloty is at present convertible to a large extent. However, certain transactions require individual permits from the National Bank of Poland (NBP). Among the currency restrictions, are issues such as holding a bank account abroad both for companies and individual customers. At the moment, the currency law prohibits the holding of bank accounts abroad. Only in exceptional cases can Poles receive permits from the NBP to maintain bank accounts outside of Poland.

OECD requirements would simplify transactions for businesses operating in Poland. Rather than importing, in each case all the funds received abroad, as it is required today, Polish companies will be able to keep them in foreign bank accounts. Today, this is only possible with an individual permit from the NBP.

For the Polish economy, liberalization would mean the freedom to transfer short-term monies, also referred to as speculation capital. This, of course, will open up the Polish market to the perils of short-term capital speculations such as foreign exchange trading.

The 1996 OECD view on the liberalization of the short-term capital flows may have changed due to the recent financial crisis. However, it remains to be seen whether this presumed change will be reflected in the forthcoming requirements with respect to the Polish market. Currently, transactions in Poland are governed by the currency law of January 1 1999. In order for Poland to uphold its obligations towards the OECD, changes to the law ought to be made before the end of this year.

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