Published: 9 May at 6 PM Tags: Euro, America, Eurozone, New Zealand Dollar, New Zealand, USA, Sweden,
Earlier this week Graeme Wheeler, Governor of the Reserve Bank of New Zealand
, intimated that the central bank had intervened in order to lower the â€˜Kiwiâ€™s export-damaging exchange rate strength.
â€™s Finance Minister has reasserted his belief that his nation must act if the Kronaâ€™s advancement continues to negatively impact conditions for exporters.
As exports account for roughly 50% of Swedenâ€™s economic output, ensuring Sweden remains competitive is essential for the nationâ€™s continued growth. But as the struggling Eurozone is one of Swedenâ€™s major export markets the Kronaâ€™s strength is having a concerning effect on trade. Just last week the Finance Minister slashed his growth forecasts for next year as a result of the damage the export situation
Sweden is now one of a handful of European nations which has managed to hold on to its coveted AAA credit rating, making it something of a safe-haven in tumultuous times. Since the onset of the global financial crisis in 2008 the Krona has climbed by 28 per cent against a fluctuating Euro.
During a televised interview Anders Borg asserted: â€˜Given the slowdown in European markets, for us to stay competitive we need to think also about the currency. The market should set the price of the currency, itâ€™s a free floating currency, but we canâ€™t ignore if thereâ€™s a potential risk for excessive movements in the markets [...] I do think the Krona is potentially becoming a little bit of a problem, so I think we have to watch it very carefully to see where it goes. I donâ€™t think itâ€™s dramatically off fair value today but if it continues to move and we are becoming a safe-haven it could be a problemâ€™.
Already this week Borg has stated that the Kronaâ€™s strength could become a cause for concern for the Riksbank, remarking: â€˜I strongly support the central bankâ€™s independence but we also have to have a discussion about where the currency is heading.â€™
As of Thursday, 9th May 2013, the Pound Sterling currency rates mentioned within this news item were as follows:
GBP EUR exchange rate was 1.1851, GBP USD exchange rate was 1.5452, and GBP NZD exchange rate was 1.8378.