The Swedish krona lost against the euro and the dollar today after the
nation’s central bank unexpectedly cut its benchmark interest rate and
stated that the recession is deeper than predicted.
The Swedish currency went down after a
statement from Riksbank affirming that the current recession in the
country requires broader measures to be halted, offering loans of 100
billion kronor ($13 billion) to domestic banks. The extreme majority of
economists predicted the interest rates to remain unchanged, but a
quarter point cut took the rates to a record low of 0.25 percent,
followed by an statement affirming that such levels will persist until
next year’s autumn, surprising traders, bankers, and analysts. Forecasts
suggest that the Swedish economy will shrink 5.4 percent this year, the
deepest recession among the Nordic countries, reflecting negatively on
the krona outlook.
Economic analysis towards the Swedish economy
are rather grim, pointing the relation of the global slump to the
consequences it brought to Sweden, from Latvia’s economic collapse to
the shrinking economy in North America, Sweden has been deeply affected,
and the impact in the nations currency can be equally perceived by the
devaluation of the country’s currency. A record low interest rate, which
was set today by the Swedish central bank will weigh even further on
the weakening krona’s attractiveness.
EUR/SEK traded at 10.8150 as of 10:57 GMT from a previous rate of 10.7245. USD/SEK followed, rising to 7.6615 from 7.5959.
If
you want to comment on the Swedish krona’s recent action or have any
questions regarding this currency, please, feel free to reply below.
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