The Swedish krona tanked against other currencies today after Sweden’s central bank signaled that the planned interest rate hike will happen later than it was previously expected.
The Riksbank left its main interest rate unchanged at -0.25%. The bank signaled that it is delaying the hike:
The Executive Board has decided to hold the repo rate unchanged at â0.25 per cent and assesses that the rate will remain at this level for a somewhat longer period of time than was forecast in February. The repo rate is expected to be raised again towards the end of the year or at the beginning of next year and rate rises thereafter are expected to occur at a somewhat slower pace.
The reason for that was the weaker inflation outlook:
Outcomes in recent months suggest that inflationary pressures are slightly weaker than expected and, overall, inflation is now expected to be somewhat lower over the next few years compared with the previous forecast.
USD/SEK surged from 9.4266 to 9.5580 as of 10:27 GMT today, trading near the highest level in several years. EUR/SEK climbed from 10.5154 to 10.6470, also reaching a multi-year high.
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