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Carl Johan von Seth: the Riksbank has chewed more of the crown than it can swallow

There is something strange with the Swedish currency. Serial ”Kronmysteriet at Brunkebergstorg”, that has eluded the Riksbank, continued on Tuesday morning.

once Again weakened the crown. At lunchtime cost a million 10:59 – about 40 cent more than at year-end. And as late as in the spring 2017 cost euro only 9:50. Clean the find.

Today's weak levels, the Swedish currency is not actually seen in decades.

was, admittedly, not entirely inexplicable. The usual interpretation is that exchange rate fluctuations having triggered of the new inflationsstatistik from statistics SWEDEN. Inflation in February showed itself – just as in January – have been lower than what the Riksbank had expected. The kitty at risk of dashing the bank's plans to raise its key interest rate a step in the fall.

financial Markets, which reward the currencies related to interest rate hikes, reacted by fleeing the crown.

The enigma lies instead in the long-term weakening. In principle, all Swedish expert authorities in the past year, with a strengthening, in line with the old konjunkturmönster.

the national institute of economic Research predicted last year that the value of the krona should rise and reach a peak in 2019. And during last spring started state the national debt even to speculate a strengthening of the Swedish currency.

Now, there is talk instead about a new bottom. Really pessimistic of the forecasters, as the Dutch ING, think that the euro in the summer can cost 10:70.

expected a stronger Swedish krona, and have been surprised by the negative trend.

But it was they who weakened it. Low interest rate provides a weaker crown, and a weaker krona increases the rate of inflation and the fires on the domestic demand. It takes place through several mechanisms that the Riksbank has been paying attention.

One way in which it is done is to import goods simply become more expensive. The other side of the same coin is that industrial goods will become cheaper for the outside world, thereby increasing exports. Although this exportstimulans worn off as world trade become more sammanvävd, but is partly left.

It is said that a weak dollar making us poorer. But it also depends on the. The shares and other savings that the swedes owns abroad rises in value when the crown is ticking down. The central banks ' models say it provides an injection into the economy. Kronkursens gloomy trend can still help the Riksbank.

to minusräntan have given a too sudden impact on the exchange rate.

the Old equilibrium seems to have been shaken. The currency falls and rises not quite as before. The riksbank may have gnawed a bit more on the value of the krona than it can swallow.

Read more: more Expensive for travel and food when the krona weakened

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