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Croatian parliament passes law fixing Swiss franc's exchange rate for 1 year

Xinhua, January 23, 2015 Adjust font size:

Croatian parliament on Friday passed an amended law fixing the Swiss franc (CHF) exchange rate towards Croatian kuna (HRK) for a year.

The amended law was passed almost unanimously with 81 votes for, one against and one abstained vote.

Due to direct actions made by Swiss central bank, the CHF's value grew for more than 20 percent in relation to HRK in a week, thus putting people with loans connected to CHF in unfavorable position.

In order to prevent the crisis, Croatian government announced putting the amended law on consumer crediting in parliamentary procedure on Monday. The main point was to keep the level of 6.39 HRK for one CHF, as it was before its sudden rise.

HRK's exchange rate is closely linked to euro, while most loans have the foreign currency clause in euro or CHF.

The total sum of loans connect to CHF in Croatia amounts to around 3.6 billion U.S dollars, out of which 3.1 billion U.S. dollars are housing loans, representing 36.5 percent of all housing loans in Croatia.

Since there are around 60,000 of these loans, some 200,000 people are directly affected by the CHF growth in a country with a population of only 4.2 million. Endit