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13 Mar 2015
Riksbank reiterates unlikely to tolerate stronger krona – BTMU
FXStreet (Barcelona) - Lee Hardman, Currency Analyst at Bank of Tokyo-Mitsubishi UFJ, cites Riksbank Governor’s comments highlighting the concerns of the central bank due to a strengthening SEK, and further comments that the stronger krona increases the likelihood easing or an FX intervention.
Key Quotes
“The Swedish krona also weakened modestly yesterday partially revising some of its recent gains against the euro.”
“Krona weakness followed comments from Riksbank Deputy Governor Per Jansson expressing concern over krona strength. He stated that the Riksbank should be pro-active in avoiding excessive krona gains emphasizing that the EUR/SEK rate “will be very important part of our policy discussions.”
“He noted that a lot of the more positive inflation dynamics that we now see in the figures come from the (lower) exchange rate. “If that starts to appreciate, and, in particular, if that goes fast again, then we’re in big trouble”.”
“He concluded that “you can’t wait until you think, OK, now we’ve reached the level for the krona where we’re in really big trouble…you have to act before that”.”
“The comments clearly highlight that the Riksbank is unlikely to tolerate a continuation of the recent strengthening of the krona against the euro which is increasing the likelihood of more monetary easing and/or direct intervention to weaken it.”
Key Quotes
“The Swedish krona also weakened modestly yesterday partially revising some of its recent gains against the euro.”
“Krona weakness followed comments from Riksbank Deputy Governor Per Jansson expressing concern over krona strength. He stated that the Riksbank should be pro-active in avoiding excessive krona gains emphasizing that the EUR/SEK rate “will be very important part of our policy discussions.”
“He noted that a lot of the more positive inflation dynamics that we now see in the figures come from the (lower) exchange rate. “If that starts to appreciate, and, in particular, if that goes fast again, then we’re in big trouble”.”
“He concluded that “you can’t wait until you think, OK, now we’ve reached the level for the krona where we’re in really big trouble…you have to act before that”.”
“The comments clearly highlight that the Riksbank is unlikely to tolerate a continuation of the recent strengthening of the krona against the euro which is increasing the likelihood of more monetary easing and/or direct intervention to weaken it.”