Austrian borrowers' FX loan rate hits 10 year low

VIENNA Thu Nov 22, 2012 5:01am EST

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VIENNA Nov 22 (Reuters) - Austrian private borrowers cut their exposure to foreign currency loans to a 10 year low in September as they became more risk-aware, the FMA markets watchdog said on Thursday.

Adjusted for currency rates, foreign borrowing by households fell 13 percent year on year to 33.4 billion euros ($42.8 billion) as of Sept. 30, with 93 percent held in Swiss francs and almost all the remainder in Japanese yen.

That brought the share of loans held in foreign currencies to 25 percent, the lowest for a decade.

The FMA halted the issue of new foreign exchange loans four years ago to curb risks associated with such borrowing.

"We see this sharp fall also as evidence of heightened risk-awareness on the part of borrowers and lenders," FMA chiefs Helmut Ettl and Kurt Pribil said in a statement.

The Swiss franc rose 37 percent against the euro from the start of 2008 until the Swiss National Bank capped it more than a year ago to stave off the threat of recession and deflation.

Thousands of Austrians had borrowed in francs or yen to take advantage of low interest rates for mortgages.

($1 = 0.7801 euros) (Reporting by Georgina Prodhan; Editing by Toby Chopra)

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