Swiss Francs, Romanian Loans

The Parliament of Romania decided to discuss the situation entailed by the record-high exchange rate for the Swiss franc against the Romanian leu.

România Internațional, 20.01.2015, 13:39

Last Thursday’s decision by the Swiss Bank to abandon the cap on the value of the Swiss currency against the Euro, introduced three years ago, saw the franc soaring, which affected several Central and South-East European countries, Romania included. For the over 75 thousand Romanians who have contracted loans in that currency, the last few days have been a nightmare. They have found the payments they have to make are about 20% higher than last week. The Swiss franc has kept growing constantly on the domestic currency market.

Meanwhile, the Government, the National Bank of Romania, commercial banks and political parties are seeking solutions to help the debtors. Only two of the six Romanian banks that offered 90% of the Swiss franc loans came up with temporary solutions. One of them gives clients the option of an up to 1.5% reduction of its interest on Swiss franc loans, for three months, while the other decided to keep a fixed exchange rate of 3.80 Romanian lei for the Swiss franc, for 90 days, for the clients who have loans in that currency. Finance Minister Darius Valcov suggests either a broadening of the scope of last year’s government ordinance on rescheduling the repayment of loans for low-income clients, or renegotiations between the Romanians with Swiss franc loans and their commercial banks. The latter option is also backed by the central bank.

Political parties have also come up with suggestions. The Social Democratic leader, Prime Minister Victor Ponta, has called for consultations with all parties to identify a legislative solution, after talks with the National Bank and private banks. The leader of the People’s Movement Party in opposition, Elena Udrea, has proposed that the Government should pass an emergency ordinance allowing the people who have contracted loans in foreign currencies to swap them for national currency loans, at the currency exchange rate at the time when the loan was contracted, plus/minus 20%. In turn, the Liberals in opposition have called for a special parliamentary session to pass an individual insolvency bill, as they say Romania is one of the few European countries lacking such a law.

The Chamber of Deputies has decided to submit the draft law to the Judicial Committee on Wednesday, and to hold a special session shortly after the Committee has drawn up its report. On Wednesday, the Budget Committee will discuss the topic with representatives of the National Bank of Romania.