Bucking the broad market sell-off on Tuesday, Polish stocks and country-specific exchange traded funds rallied on a government plan to help home owners struggling to finance Swiss franc-denominated mortgages.

On Tuesday, the iShares MSCI Poland Capped ETF (EPOL) gained 3.8% and Market Vectors Poland ETF (PLND) rose 3.2%, and both funds broke above their long-term, 200-day simple moving averages. Meanwhile, the broad iShares MSCI Emerging Markets ETF (EEM) was down 1.4%.

Polish equities rallied after Warsaw laid out plans to offer banks inducements to help home owners with costly Swiss franc mortgages to switch them into zlotys-denominated loans, a shift from earlier proposals for compulsory conversions, Reuters reports.

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The zloty currency appreciated 1.3% to $0.2595 and the banking sector registered the largest gains, with some financial firms jumping by up to 13.5%.

The financial sector is the largest component of the Poland ETFs, accounting for 43.8% of EPOL and 38.3% of PLND.

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Over half a million Poles took out franc-denominated loans to capitalize on the low rates in Switzerland. However, they now face higher repayments after the Swiss currency doubled in value against the zloty over the past few years.

“Our goal is to redenominate loans,” presidential aide Maciej Lopinski told a news conference. “But there are different ways to achieve it. There is the legislative route and the amicable route.”

The Polish financial sector previously experienced a steep sell-off after a proposal in January for legislation would force banks to convert the foreign currency loans at historical exchange rates, potentially costing lenders some 67 billion zlotys, or $17 billion.

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“This (new) proposal is much milder compared with what had been proposed earlier,” brokerage DM BOS’s analyst Lukasz Bugaj told Reuters.

For more information on the developing economies, visit our emerging markets category.

iShares MSCI Poland Capped ETF