Like other developing countries, Poland based its interwar monetary policy on the gold exchange standard. Following a bout of hyperinflation , Władysław Grabski’s 1924 reform led to the establishment of the Bank of Poland. Early efforts to return to the gold standard, however, were not entirely successful. In 1925, an economic crisis weakened the zloty dramatically, before futher monterary reforms were introduced in 1927. Post-war monetary instability made Poland reluctant to abandon the gold standard after 1929 and foreign exchange controls were first introduced as late as 1936. The central banks reluctance to abandon the gold standard contributed to the depth and persistence of the Great Depression in Poland. The chapter thus reveals the challenges faced by a newly-formed country lacking adequate reserves and a financial track record to stabilise its currency; it also points to the path dependent nature of interwar monetary policy: the hyperinflation of 1919-23 and the crisis of 1925 created the belief that any easing of monetary policy would trigger an inflationary spiral. When the Great Depression struck, exchange rate stability trumped all other macroeconomic and financial policy objectives.