NBP: FX mortgage bill will be very costly

Image : shutterstock

The National Bank of Poland calculates the cost of the Presidential foreign mortgage bill to be at least PLN 44 billion, Gazeta Wyborcza reports.

Within this figure, PLN 35 billion would be required to convert the mortgages from Swiss francs to złotys at the favorable rates proposed by the President’s cabinet. Another PLN 9 billion would go to covering the mortgage spreads of the holders.

However, the NBP warns that this is just a lower limit of the cost estimate, as there is potential for the złoty to weaken by 10 percent against the franc in response to the implementation of this bill, which could further increase the cost of converting the currency of the franc mortgages by another PLN 13 billion.

In a separate report published on Wednesday, the NBP declared that the FX mortgage bill would have a negative impact on the public finance sector’s stability. The legislative proposal would undoubtedly decrease banks’ cash reserves which would reduce their ability to withstand other shocks, which in turn could cause credit ratings for the sector as a whole to fall.

Pin It