The Swedish krona bounced today following yesterday’s drop by 1 percent. The decline followed the surprise decision of the nation’s central bank to cut its repo rate even deeper into negative territory.
The Riksbank reduced its main interest rate by 10 basis points to -0.35 percent and extended bond purchases by a further SEK 45 billion. The central bank stated that the extremely loose monetary policy had its effects on the economy, bolstering inflation. Yet the bank decided to ease the policy even more due to uncertainty abroad, especially surrounding the situation in Greece. Additionally, policy makers were worried that the strength of the krona may damp inflation growth.
USD/SEK went down from 8.4591 to 8.4422 as of 13:23 GMT today.
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