Currencies: Helvetii are playing Santa Claus – Virtual Poland

Currencies: Helvetii are playing Santa Claus – Virtual Poland

Swiss National Bank took the unprecedented decision and brought negative interest rates. The market expected such a move, but only at the end of the first quarter of next year. Helvetii apparently decided to play the role of Santa Claus and make a gift of many Polish families have for this year’s Christmas. Polish family earned in one day 300 million zł.
 

Swiss Central Bank (SNB) cut down the deposit rate below zero to 0.25 percent. The changes will take effect on January 22 next year. This move was taken into account by analysts currency, but it is only expected in March 2015. Rate franc responded immediately drop of more than 0.2 percent. against the dollar and almost 0.3 percent. the euro , of which undoubtedly enjoy thousands of Polish borrowers. But ultimately ended the day in positive territory.

At the end of October 2014. In CHF was still 37 percent. mortgage loans worth 132 billion zł (5 per cent. less than at the beginning of the year). Zloty appreciated vs. the CHF by nearly 0.2 percent. Following the decision of the Swiss Polish families so already earned nearly 300 million zł!
 

The reduction in interest is a result of the September 2011, the policy of keeping the maximum franc against the euro. SNB determined then that will defend the franc 1.20 for 1 euro. In contrast to previous methods of protecting the value of the bank now had a fairly simple task. Usually the course defended the countries whose currencies were falling over, what resources were needed cash reserves, and these – as defense – had a tendency to rapid depletion.
 

A similar scenario realized in recent weeks, the Central Bank of Russia. Swiss National Bank acted while in the other direction, that is, instead of strengthening – dołował own currency, and to achieve this goal was enough to just run the printing presses.
 

“ As a result of the decision of the Swiss Polish families earned nearly 300 million zł! “

Now SNB decided not to print, but weaken the franc reduction in interest rates. This movement causes less profitable to hold bonds issued by the Swiss government or business, or deposits in Swiss currency. Reduced demand in turn causes the decline in the terms of other means of payment.

– SNB apparently saw a lot of risk in this, as it can react to the January market move ECB – writes in his commentary Marek Rogalski, chief currency analyst DM BOS. – Could play a big role too simple mathematics. In recent days, the EUR / CHF dangerously close in around 1.2000, and Thomas Jordan (chairman of the Swiss National Bank – ed. Ed.) Acknowledged that the SNB recently had to intervene in the market. Negative interest rates sooner or later would be the necessary solution – the sooner, the less costly will defend the EUR / CHF , which is a key element of the SNB.
 

These costs are rising as reprinting risk that if the trend reverses, the weight of the “empty” Swiss franc could threaten the economy.
 

The last movement SNB actually copies the behavior of the European Central Bank , which also has a negative deposit rate now. ECB’s next move awaited in the form of quantitative easing led to faster cutting than forecast in Switzerland. Fortunately for our borrowers who took out their obligations housing francs. Poles not rejoice too soon is expected to contract by a European bank, which will most likely play further weakening of the euro by quantitative easing, including the redemption of the bond market Government money for reprints. As a consequence, it will weaken the euro strongly associated with penny. Joy so it probably will not last long.