Poland wants domestic banks to pass on negative interest rates in Switzerland to borrowers to ease the impact of the surging Swiss franc on $35 billion of mortgages denominated in the currency.
Finance Minister Mateusz Szczurek, central bank Governor Marek Belka and market regulators met with the biggest mortgage lenders on Tuesday after Croatia proposed fixing the exchange rate on similar loans to help borrowers. Polish measures stop short of Hungarian Prime Minister Viktor Orban’s move last year to order banks to convert $14 billion of foreign-currency loans into forint to cut his country’s exposure to currency swings.
“We made it clear to banks and banks agreed to take into account negative interest rates,” Szczurek told reporters in Warsaw after the four-hour meeting. “The market risk affects both banks and their clients. A client accepts the exchange rate risk while a bank takes the risk of interest rate moves.”
Switzerland’s unexpected decision to end its currency cap last week sent the zloty tumbling 22 percent against the franc, swelling payments for about 575,000 families who borrowed in the currency, and became a hot political issue before this year’s general election in Poland.
via Bloomberg 
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.