Polish central bank chief sees need for extra measures in face of franc surge

[WARSAW] A surge in the value of the Swiss franc against the zloty creates need for extraordinary measures and Polish banks should modify their liquidity policies, Poland's central bank chief Marek Belka said on Monday.

"What I had said earlier has now been strengthened by the franc's sudden surge and (there is a) necessity for measures, let's say, extraordinary," Mr Belka told radio Tok FM.

"It's mostly about the fact that banks have to modify their liquidity policy, as the new franc's exchange rate creates problems for them with financing the loans," he added.

Switzerland's decision to abandon its exchange rate cap with the euro and to cut interest rates sent the franc surging last week, spooking central European markets because of a relatively high proportion of franc-denominated debt across the region that could threaten banks.

REUTERS