Almost 200,000 Romanians who have to repay loans in Swiss Francs (CHF), most of them taken during the 2006-2008 period, have been impacted by the sudden spike of the CHF/RON exchange rate, which reached a new all-time high on Friday, January 16.

If the exchange rate remains art current levels, these people will have to pay more for their monthly instalments by as much as a few hundred RON, compared to what they have paid until mid-January. In the last six years, monthly instalments for CHF loans have almost doubled their value in local currency due to the increase of the Swiss currency against the Euro and the Euro’s appreciation against the RON.

The Swiss Franc (CHF) gained another 2.2% against the Romanian Leu (RON) on Friday, January 16, after a 16% jump on Thursday, after the Swiss Central Bank’s announcement that it will drop the Franc’s peg on the Euro.

Romania’s National Bank announced an official rate of RON 4.4228/CHF, up from RON 4.3287/CHF on Thursday. In just two days, the official exchange rate has increased by 18.2%, from RON 3.7415/CHF (on Wednesday, January 14).

The total value of the CHF-denominated loans which need to be repaid by Romanians is of approximately CHF 2 billion, according to Ziarul Financiar. The value of these loans in RON has just increased by RON 1.3 billion (or EUR 290 million), in just two days due to the Franc’s spike.

Romanians who have mortgage loans in Swiss Francs have to pay an average CHF 600 per month, according to Mediafax. They stand to lose about RON 400 per month (almost EUR 90) from the Franc’s sudden appreciation, which is a lot of money for many Romanian families.

Some local banks who granted CHF-denominated loans, said they would help their clients get through this rough period.

Late last year, rumours appeared that a Romanian bank would grant its customers the possibility to convert their loans in CHF into loans in local currency, at a discount to the exchange rate registered at that time.

The initiative didn’t materialise, however. Some politicians also wanted to intervene and force local banks to accept conversions of CHF-denominated loans into RON-denominated loans at an exchange rate below the one on the market, but the draft law was strongly opposed by local banks.

editor@romania-insider.com