The Swedish krona climbed today to the highest price in a week on the speculation that the Sweden central bank will leave the interest rates unchanged in the first month of the new year after lowering them this month.
The Riksbank decreased it target repo rate by 25 basis points to 1.75 percent. The bank wrote:
As inflationary pressures are low and economic development is weak, the Executive Board of the Riksbank has decided to cut the repo rate by 0.25 percentage points to 1.75 per cent and to lower the
repo-rate path. The repo rate is expected to remain low next year. Later on, when inflationary pressures increase, the repo rate will need to be raised gradually. Such arepo-rate path will gradually stabilise inflation around 2 per cent and resource utilisation in the economy around a normal level.
Some of the bank’s policy makers suggested to lower the rate to 1.5 percent. The central bank lowering its estimated average main lending rate for the fourth quarter of 2012 to 1.7 percent from the October forecast of 2.3 percent.
USD/SEK fell from 6.9296 to 6.8674 today as of 12:42 GMT, while the daily minimum was 6.8494 — the lowest rate since December 13.
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