Swedish Krona Declines To Near 4-month Low Versus Euro After Riksbank Rate Cut
October 28 2014 - 06:20AM
RTTF2
The Swedish Krona fell sharply against the euro in European
deals on Tuesday, as Sweden's central bank cut repo rate to zero
percent.
The Executive Board of the Riksbank lowered its key rate by a
quarter point to zero from 0.25 percent. Members assessed that the
monetary policy needs to be even more expansionary for inflation to
rise towards the target of 2 percent.
The low repo rate increases demand in the economy, which
contributes to higher inflationary pressures.
The bank, meanwhile, assessed that it is appropriate to slowly
begin raising the repo rate in the middle of 2016. It would reach
1.75 percent towards the end of 2017.
The krona slipped to 9.3480 against the euro, its lowest since
July 3, when it hit a 3-1/2-year low. The next possible downside
target for the krona lies around the 9.5 zone. The pair closed
yesterday's deals at 9.2644.
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