The Swiss National Bank’s monetary policy and Swiss franc loans in Austria
Thomas Jordan, Alternate Member of the Governing Board of the Swiss National Bank; Oesterreichische Nationalbank (OeNB)
Complete text in German: "Die Geldpolitik der Schweizerischen Nationalbank und die Frankenkredite in Österreich"PDF (170 KB)
In Austria, the trend of taking out loans in Swiss francs and yen is unbroken. The borrowers – the majority of whom are private individuals – do so in an attempt to benefit from the lower interest rates in the foreign currency vis-à-vis the euro. The degree of risk involved in borrowing in a foreign currency, however, is quite considerable.
In Switzerland, loans in foreign currency play a peripheral role. They generally tend to be taken out by companies and can mostly be ascribed to the borrower’s international business activity. Mortgages in Switzerland are denominated almost exclusively in Swiss francs.
Whether it is worthwhile for an Austrian borrower to take out a Swiss franc loan as opposed to a euro loan depends on developments in the exchange rate and the interest rate differential between the two currencies – both of which are influenced by monetary policy. It is thus vital that lenders and borrowers of Swiss franc loans in Austria have a good understanding of Switzerland’s monetary policy.