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Those who bet on loans in Swiss francs feel pinch of exchange rate

"The Swiss franc yesterday hit a new all-time high against the RON, overshooting the 3.35 RON mark, which makes it even more difficult for those who bet on the Swiss franc in past years to repay their loan instalments.

The Swiss franc exchange rate calculated by the NBR (National Bank of Romania) yesterday climbed to a historic high of 3.3504 RON, which marks an over 14% appreciation against the Romanian currency over the last three months. Bank customers with loans in Swiss francs have since the beginning of the year experienced an accelerated increase, feeling the pinch of the long overlooked exchange rate risk.
Around 10% of all retail loans are taken out in Swiss francs, with the lower interest rates compared with euro-denominated loans acting as a major draw especially in the 2007-2008 period. Even external exchange rates reached an all-time high of 3.3449 RON per one franc yesterday. News is not good, with analysts believing the Swiss franc will remain attractive in the coming period.
"The continuing high volatility on the financial markets and the robust Swiss
economy are likely to strengthen the franc's status as a safe haven," says Ingo Jungwirth, an analyst with Raiffeisen Bank in Vienna." writen by Liviu Chiru