Europe
Poland evaluates influence of Swiss currency exchange rate policy
Last Updated: 2015-01-21 07:44 | Xinhua
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The Polish Financial Stability Committee held a meeting on Tuesday discussing the changes in the Swiss franc currency exchange rate policy, the Polish Finance Ministry said.

The meeting was mostly aimed at analyzing the influence of this change on Polish debtors.

The meeting, attended by the country's most important economical specialists and some commercial banks representatives, was held under the chairmanship of Finance Minister Mateusz Szczurek, who is also the chairmen of the Committee.

The experts evaluated that the stability of Polish financial system was not threatened.

Despite relatively large share of real estate loans, nominated or indexed to the franc (131 billion zloty and 7.7 percent of the GDP at the end of November 2014 and almost 160 billion zloty and 9.4 percent of GDP after the franc appreciation), the Polish bank sector is stable and resistant to any external shocks, said the experts.

The foreign currency loans are best handled credits, and the value of credits in franc portfolio is systematically decreasing due to their successive paying off and the lack of newly granted credits tied with franc.

During the meeting, the representatives of banks pointed out that there was no need to require additional collaterals for the loans.

Also the negative influence on the country's economy, such as limited consumption of household due to the increasing costs related to foreign currency housing loads service were considered to be insignificant, therefore there was no need for taking any actions with the long-term effects at present, and any actions must be withheld until the situation of the currency market is stabilized and a new rate of franc on the world's markets is established.

The Swiss National Bank (SNB) announced unexpectedly on Thursday, Jan. 15, that it ceases to defend its currency and releases franc exchange rate, which remained pegged until that time (meaning that euro could not cost less than 1.2 franc). Together with this decision, the SNB lowered the interest rate to -0.75 percent, resulting in panic and confusion on the market.

On Thursday before noon, exchange rate of franc exceeded 5.19 zloty, a historical record. Before that franc only cost 3.57 zloty. The SNB's decision struck into hundreds of thousands of Polish borrowers indebted in francs.

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