WARSAW, Feb 5 (Reuters) - The impact of the surge of the Swiss franc on Poland’s economy and banking system, which holds a high share of Swiss franc-denominated mortgages, is not yet a concern, the lead analyst for Poland of Moody’s Investors Service said.
Marco Zaninelli told Reuters that the country was likely to exit the European Union’s excessive deficit procedure in 2016, which would support its A2 rating.
The Moody’s analyst said that potentially higher instalments on franc-denominated mortgages might reduce consumption.
“But at this stage it appears not really worrying in terms of the impact that it could have on asset quality in the banking sector,” Zaninelli said in comments authorised for release on Thursday.
“In case of a more significant depreciation, there would be a more significant impact, but I do not think any systemic risk can really be foreseen at the moment,” he said.
Polish banks hold Swiss franc mortgages worth about $40 billion, or 9 percent of gross domestic product.
The surge of the Swiss franc in January after the removal of the currency’s cap by the Swiss National Bank led to an increase in the value of these loans against the Polish zloty .
Zaninelli said that Poland was likely to exit the EU’s excessive deficit procedure -- which subjects it to great budget surveillance from Brussels -- in 2016, but that would not automatically lead to an upgrade of Poland’s rating or the country’s stable rating outlook.
“The end of the (...) procedure would represent a credit positive factor but it needs to be evaluated with the interaction of other potential factors affecting the creditworthiness,” he said.
Many economist in Poland believe that the country’s rating is likely to be upgraded after the exit.
“The balance of risks for the rating is neutral in the sense that at the current stage the situation in the Polish economy is consistent with our A2 rating with a stable outlook,” Zaninelli said.
Poland, the largest economy in central and eastern Europe, expanded by 3.3 percent last year, faster than most of its peers in the European Union. (Reporting by Marcin Goettig; Editing by Toby Chopra)