The Sweden krona fell against the US dollar today after the Swedish central bank kept its key repo rate unchanged. The currency weakened against the euro as the accompanying statement hinted that the bank may lower rates in the future.
The Riksbank left its main interest rate at 1.25 percent and wrote in the statement:
The Swedish economy has so far grown at a good pace, but is now slowing down due to the weak developments abroad.
The central bank said that the situation on financial markets improved, but the European economy remains under threat of the crisis, while the US economy looks somewhat better. The Sweden krona fell against the US dollar today after the Swedish central bank kept its key repo rate unchanged. The currency weakened against the euro as the accompanying statement hinted that the bank may lower rates in the future.
The Riksbank hinted that it may ease its monetary policy:
The situation in the euro area is problematic and could worsen, which could have further negative effects on the Swedish economy. In this situation, the repo-rate path may need to be lower.
At the same time, the bank noted that “the Swedish economy has so far been unexpectedly resilient” and, in fact, higher lending rates may warranted.
USD/SEK was down from 6.7106 to 6.7079 as of 22:36 GMT today. EUR/SEK rose from 8.6796 to 8.6812.
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