Swedish krona continues to weaken

After the Swedish Central Bank decided last week to introduce negative main (repo) interest rates, the Swedish krona weakened considerably.

One US dollar is now worth over nine Swedish kronor and one euro is worth over ten kronor. This is expected to be a blow to Swedish vacationers travelling abroad this summer.

Johan Javeus, chief strategist at Swedish bank SEB, told Swedish Radio News that the krona is most likely going to have a tough time continuing into the spring and summer. He also said that the Central Bank's decision to weaken the main (repo) rate will continue to weaken the krona even more.

However, Javeus said that a weaker krona is probably exactly what the Central Bank wanted to see after lowering the rate last week. He said that could lead to increased exports and growth, while at the same time making imports more expensive, which in turn can increase inflation.