BUCHAREST, Jan 30 (Reuters) - The Swiss central bank’s decision to lift the cap on the franc was a major shock but policymakers should not rush into decisions on how to tackle the problem, Romanian Central Bank Governor Mugur Isarescu told reporters on Friday.
Hundreds of thousands of people across Central and Eastern Europe took out home loans denominated in Swiss francs in the early 2000s despite warnings from economists, attracted by lower interest rates than those offered in local currencies.
Mortgage payments are set to soar since the Swiss central bank abruptly removed the cap on the currency earlier in January, although the impact is expected to be lower in Romania than in some of its wealthier neighbours.
“Most outside shocks are like earthquakes, meaning no one knows they are coming, which makes them dangerous,” Isarescu said. “The best approach is to let things settle down. It’s not good to work with strong emotions and in haste.”
Reporting by Luiza Ilie; writing by Matthias Williams