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Swiss franc bounces to all-time high against zloty

PR dla Zagranicy
John Beauchamp 15.01.2015 13:17
The Swiss franc leaped to an all-time high against the Polish zloty, Thursday, after the Swiss central bank decided to scrap the minimum exchange rate to the euro.

On Thursday morning, the franc shot up to over PLN 5.19, the highest exchange rate of the two currencies in history. By the afternoon, the rate had settled at around PLN 4.23, however.

The market response was caused by the Swiss National Bank, which discontinued its minimum exchange rate to the euro, which was at CHF 1.20.

“The Swiss central bank stopped defending the CHF1.20 limit against the euro, and as such one can expect the franc to grow stronger by 15-20 percent,” Piotr Kuczynski from Xelion brokers told the PAP news agency.

“As a result, the Swiss franc will strengthen against the zloty, most likely to around between PLN 4.05 and PLN 4.25,” he added.

Thursday’s decision by the bank has caught many by surprise, with mBank’s Kamil Maliszewski saying that “the market will take some time to even out after the Swiss franc shock”.

“In the current situation it is certain that the CHF/PLN exchange rate will be above PLN 4 and the stablilisation of the exchange rate will be very painful for mortgage holders in Central Europe,” Maliszewski underlined.

“In this light, [Wednesday’s] decision of [Poland’s] Monetary Policy Council may be problematic as the drop in domestic disposable income due to CHF mortgage payments will have a significant impact on consumption in the months to come,” he concluded. (jb)

tags: Swiss franc
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