The decision of Swiss National Bank to abandon the cap of the value of Swiss Franc against the euro has shocked the markets and pushed Switzerland’s national currency to soar up to 30%.
Exchange rate
before decision: 1 euro = 1.20 Swiss Franc
after decision: 1 Swiss Franc = 0.805 euro
The soar of the Swiss franc did not only caused shock and owe to international traders, but also to Greek borrowers.
Some 65,000 Greeks who had their mortgage loans in Swiss Franc will not only see their loan capital increase by approximately 25% but also see their monthly repayment installments increase as well,” Greek media report on Thursday afternoon.
It is estimated that 65,000 Greeks with mortgages in Swiss Francs are now trapped seeing their debts growing.
Bankers see that the number of “red loans” to increase.
Mortages in Swiss Francs were much praised and much promoted in 2006-2008, when the interest rate was 2%-2.5%, while the Euro libor rates were at 3.6%-5%.
Loans in Swiss Francs were very benefiting for the borrowers due to the low interest rates and the weak Swiss currency in relation to euro.
“The Swiss franc has soared some 30% in chaotic trade as the central bank abandoned the country’s cap on the currency’s value against the euro.
The Swiss National Bank said the cap, introduced in Sept. 2011, is no longer justified.
At the same time it reduced a key interest rate from -0.25% to -0.75%, increasing the amount investors have to pay to hold Swiss deposits.
Following the SNB move the Swiss franc went from 1.20 to the euro to 0.8052.”(BBC)
PS well….
It seems that many of the Swiss franc loans are illegal. I urge anyone with a Swiss franc mortgage to seek legal advice immediately.
how can they be illegal?