The UIP equation estimated for Poland shows that the reaction of the nominal exchange rate of zloty to the expected changes of the future interest rates (appreciation) has been almost twice as high as the exchange rate reaction to disparity changes (depreciation). If the budget deficit and...

The aim of this study is to investigate the effects of monetary policy on financial asset prices in Poland. Following Gürkaynak et al. (2005) I test how many factors adequately explain the variability of short-term interest rates around MPC meetings, finding that there are two such factors. The...