The Swedish krona jumped today even after Sweden’s central bank had cut its target repo rate amid concerns about the financial crisis in Europe. There were speculations that the bank will not decrease interest rate next year, though it is not guaranteed.
The Riksbank lowered its key interest rate by 25 basis points to 1 percent today. The bank explained the decision:
The weak developments in the euro area are clearly affecting the Swedish economy, which is now slowing down. Household consumption is weak, unemployment is rising and inflationary pressures are low.
As for future actions, the Swedish central bank suggested that both cuts and hikes are possible, depending on the economic conditions.
USD/SEK dropped from 6.6559 to 6.6207 as of 14:20 GMT today.
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