Poles exhale as Swiss vote against higher gold reserves

A ballot box is emptied at a voting center in Zurich, Switzerland, 30 November 2014. EPA/ALESSANDRO DELLA VALLE

The vote was held in response to the “Save our Swiss gold” initiative, proposed by right-wing Swiss People's Party.

The bloc wanted the Swiss National Bank (SNB) to keep at least 20 percent of its reserves in gold and have it stored only in Switzerland.

However, ultimately 77.3 percent of Swiss voters opposed the initiative.

In Poland, the referendum was closely watched due to the fact that some 700,000 Poles have mortgage loans denominated in Swiss francs. Many expected the currency to appreciate strongly if gold reserves were increased, causing the loans to inflate in value.

“The [voting] result means that Swiss franc loan holders can relax,” Ryszard Petru, head of the Polish Economists' Association, told Polish Radio.

He added that the SNB has vowed to keep the Swiss franc at no more than 1.20 per euro.

Pawel Cymcyk from fund management firm ING TFI said that the result was no surprise. In his opinion it was a good decision.

“Another decision made by the Swiss would not necessarily be painful for our Swiss franc borrowers,” said Andrzej Sadowski of the Adam Smith Centre.

While the currency rate would grow, the Swiss central bank would reduce interest rates to below zero to make keeping the franc and unprofitable business. The final result would be neutral for loan holders, he explained. (kw)

Source: IAR