With the exception of early repayment, all rescue packages provided to FX-denominated creditors were highly distrusted. Many were also deterred from fixing the exchange rate, as many hoped that even much more help would come, which they might lose. Now that we are seeing more and more what a package of foreign currency loans that will be completed by the end of the year will be, let’s see if those foreign currency lenders who haven’t asked for any help have really done better?
Why not use the exchange rate barrier?
The bill, which has already been adopted, will not automatically be eligible for redemption and families participating in the Asset Management Program through the elimination of exchange rate gains and unjustified increases in interest rates. The money center calculated how much this would mean for a foreign currency loan.
According to the paper, an average loan can return more than 1 million dollars, while the early repayers were able to repay their debts at a rate of 180 dollars as compared to 255 in December 2011, giving them a 30 percent discount on their principal. This means that even with the arrears of $ 3 million in 2011, it would be worth paying it back rather than waiting. The only question is whether they will receive a similar exchange rate discount or interest rate subsidy by the end of the current year with the second bailout expected in September.
Is it worth asking for Asset Manager?
As early as January 2013, debtors who are 90 days overdue can apply for Asset Manager assistance, losing their home ownership, but no longer paying off their debt and staying in their original home for a very low rent. This program helps the most needy families who are actually unable to pay their debts, so it is worth exploring the chances that these families will be able to recover from the new rescue package and even keep their home.
The table shows the rent to be paid in the program for the current value of the flats, the current repayment for the family and Rogan’s promise to reduce it by the end of the year, when foreign currency loans will be permanently withdrawn. For example, for a 10 million apartment, the family will have to pay $ 12,500 when they enter the program, which is nearly a tenth of the installment they were unable to pay.
Those who have not yet signed the paperwork required to enter into the Asset Manager program should consider paying the down payment, which is several times the rent applied for in the program, but can keep their apartment. In this case, however, they also have to settle their arrears, which may be partly covered by the amount due to the exchange rate gap and the cancellation of interest rate increases.
The currency lockers are sure to fail
Under the current law, overpayments from exchange rate gains and increased interest rates will continue to return during the period of exchange rate fixation, so nothing has gone wrong with the debtors who chose this scheme. In fact, tens of thousands of dollars could still remain in their pockets due to the releasing of interest payments on the fixed exchange rate.
The only question is what will happen by the end of the year and what will happen to the balance, which has been converted to dollar and transferred to a collective account at the time of fixing the exchange rate. Will it also be reduced by the preferential exchange rate or remain the same? However, even in the latter case, it is probably less than the amount obtained by foregoing interest rates, so there is no reason for the pegs to go crazy.
As with any other rescue package, there is no reason for anyone, as the rental price requested by Asset Manager is much lower than the wildest promises, and early repayment is a huge and secure business, while fixing the exchange rate will only mean further relief.