The Swiss franc leaped to an all-time high against the Polish zloty after the Swiss central bank decided to scrap the minimum exchange rate to the euro.
On Thursday morning, the franc shot up to over 5,19 zloty, the highest exchange rate of the two currencies in history. By the afternoon, the rate had settled at around 4,23 zloty.
The market response was caused by the Swiss National Bank, which discontinued its minimum exchange rate to the euro, which was at 1,20 Swiss franc.
– The Swiss central bank stopped defending the 1,20 Swiss franc 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 4,05 zloty and 4,25 zloty.
– In the current situation it is certain that the franc/zloty exchange rate will be above 4 zloty and the stablilisation of the exchange rate will be very painful for mortgage holders in Central Europe, mBank?s Kamil Maliszewski underlined. – In this light, decision of Monetary Policy Council may be problematic as the drop in domestic disposable income due to the Swiss-franc mortgage payments will have a significant impact on consumption in the months to come, he concluded.
However, the Polish National Bank has announced that the Polish banking sector is stable and resilient to external shocks.
