Swedish central bank prepares to act over strong currency

Sweden’s central bank governor Stefan Ingves has issued a warning that the Riksbank may intervene in currency markets if the krona continues to appreciate against other currencies, given the risk this poses to the bank’s inflation targets.

“The recent appreciation in the Swedish krona creates risks for the upturn in inflation. If the exchange rate strengthens earlier and more rapidly than forecast, it will be more difficult to push up inflation towards the target. The Riksbank is therefore highly prepared to intervene on the exchange market whenever we deem it necessary,” Ingves (pictured) said.

The Riksbank inflation target is currently set at 2%, but the rate has been undershooting this target for what it calls “a relatively long period of time”. The bank has no official exchange rate target.

 

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