People who took out Swiss franc-denominated loans in recentyears, lured by the smaller nominal interest rates displayed bybanks, are now seeing themselves having to pay increasingly higherinstalments as the exchange rate is hitting all-time highs. Thefranc is now 28% stronger against the RON than in late 2008 and 57%higher than in December 2007.
The rising exchange rate is directly visible in the value ofmonthly instalments when denominated in RON, and the brisk pace atwhich it went up in 2010 is already visible in the rate at whichoverdue payments rise.
The population in November had outstanding instalments worth theequivalent of 172m euros for Swiss franc loans, six times more thana year before, according to NBR's latest data.
The franc's growth against the RON comes as a result ofinternational market movements, with major investors seeking thesafety of Swiss assets. Thus, the franc stands at all-time highsagainst the euro and this indirectly translates into the exchangerate against the RON.
Some clients are now mulling changing the borrowing currency, butthey are in for surprises.
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