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(Bloomberg) -- Calls for Poland’s government to help Swiss franc borrowers are mounting as the zloty’s slump last week swelled loan payments for millions of Poles and fueled concern more will fall behind on franc loans.

The Swiss National Bank’s unexpected scrapping of its currency cap last week sent the zloty tumbling 22 percent against the franc from a day before the decision. That triggered a comparable jump in the zloty value of loan principles and and monthly payments for about 575,000 Polish families owing a total $35 billion in mortgages denominated in the Swiss currency.

If the franc “remains above the 4 zloty level in the longer term, the government may provide support” to debtors, Deputy Prime Minister Janusz Piechocinski said Sunday, without elaborating.

The SNB’s abandonment of its franc floor roiled markets in some eastern European countries, where policy makers have tried to wean borrowers off of foreign currency loans. While Polish banks stopped granting franc-denominated home loans after the global economic crisis caused the zloty to plunge in 2008, mortgage holders in the country of 38 million are still paying off debt taken last decade when they saw the franc as a way to borrow cheaply in an environment of a strengthening zloty.

Zloty Losses

The zloty has lost 4.72 percent against the euro this year, making it the world’s 11th worst-performer against the single European currency, according to data compiled by Bloomberg. It gained 1.59 percent to 4.27 against the franc at 12:50 p.m. in Warsaw, a second day of gains after it lost 24.5 percent on Jan. 15.

The government will watch “further developments on the FX market,” Krystyna Skowronska, head of the parliamentary finance committee and a representative of the ruling Citizens Platform party, said in an interview with Radio 1 on Monday.

Poland’s Financial Stability Committee, whose members include the finance minister, the central bank governor and the financial market watchdog, is meeting tomorrow to discuss the loans. Some commercial banks will also attend, Jacek Bartkiewicz, a central bank management board member, said in interview with Radio 1.

“The Polish government could help borrowers with franc- denominated home loans if monthly repayments are too high compared with their income,” Bartkiewicz said. Such measures could include helping borrowers with monthly installments exceeding “say, 40 percent” of their income or the “transfer of some government aid for new home buyers to those in trouble now,” he said.

Banks should also agree to renegotiate loan contracts with clients, helping them ease the burden of higher debt costs by, for example, extending loan maturities, he said. He added the zloty may remain above 4 against franc “in the mid-term.”

Banks are ready to discuss contract terms with troubled debtors, Cezary Stypulkowski, chief executive officer of MBank SA, said on Jan. 15.

To contact the reporter on this story: Marta Waldoch in Warsaw at mwaldoch@bloomberg.net To contact the editors responsible for this story: Elisa Martinuzzi at emartinuzzi@bloomberg.net Michael Winfrey, Balazs Penz

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