Bloomberg News

Riksbank’s Ekholm Says Weaker Krona Stabilized Inflation

March 15, 2012

Riksbank Deputy Governor Karolina Ekholm said the recent weakening of the krona has eased the need for policy makers to revise their inflation forecast lower.

The currency would need to strengthen “quite a bit” to affect monetary policy through lower inflation, she said to reporters in Stockholm today.

The Swedish krona has weakened almost 1 percent against the euro since Feb. 16, when the Riksbank cut interest rates for second consecutive meeting to ward off a recession in the largest Nordic economy. Policy makers lowered the repo rate by a quarter of a percentage point to 1.5 percent, and indicated they will keep rates unchanged until the first quarter of 2013.

Ekholm, going against a majority of the six-member board, last month advocated lowering the rate to 1.25 percent and a repo-rate path of 1 percent through the third quarter of 2013.

The krona strengthened 0.2 percent to 8.9146 per euro and 0.4 percent to 6.8252 per dollar today.

To contact the reporter on this story: Johan Carlstrom in Stockholm at jcarlstrom@bloomberg.net

To contact the editor responsible for this story: Jonas Bergman at jbergman@bloomberg.net


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