Chinese Interest Behind the Rising Krona

The Swedish krona has risen sharply in the last month, both against the euro and the American dollar.

Speaking to Swedish Radio News, Robert Bergqvist, chief analyst at the bank SEB sees three reasons for the improvement: the generally weaker dollar, expectations the Bank of Sweden will continue to raise interest rates here, and speculation that the Chinese Central Bank will increase its holdings in Swedish assets.

Bergqvist says China has around 1000 billion dollars in its currency reserves, and wants to spread the risk, which has led to higher demand for the krona. While the increase in the value of the currency makes it harder for Swedish exporters to sell their products, Swedish households are getting lower prices for goods from abroad, which is a nice bonus as Christmas approaches.

The rising krona also keeps down the late of inflation, which means that Bank of Sweden might not be iucreasing interest rates as much as believed.

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