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The Swedish Krona continues to break record in strength

Thursday, 14 March 2013
The Swedish currency, the Swedish Krona is now stronger than it was when the fixed exchange rate was abandoned. It has now strengthened against all of the world's major currencies in the past year.

On Wednesday the Kix-index, the index from the Swedish National Institute for Economic Research (NIER) - Krona index, KIX  yesterday stood at 99.80 and on Friday it was  99.81. This means that the Krona is now 0.2 percent stronger than it was when the Riksbank, he central bank stopped  pegging the Krona on 19 November 1992, according to reports on Swedish business daily, Dagens Industri.

After the Swedish currency was allowed to float, it weakened rapidly by about 25 percent. The weakening helped lift Sweden out of the crisis in the early 1990s.

During the 20 years that followed the pattern was usually that the krona weakened when the economy deteriorated and during periods of financial turmoil. Judging by Sweden's current account surplus, which has been around 6-7 percent of GDP in the past 15 years, the Swedish currency has been systematically undervalued, writes the paper.

The weakest time for the Krona was in early March 2009, when the financial crisis was at its worst. Kix index was recorded when to 135. The Krona was thus 35 per cent weaker than when it began to float.

Since then, the Krona gradually gained ground. Sweden, with stable public finances and balanced budget, in the aftermath of the crisis has seen itself separated from the outside world. To have an AAA rating with a stable outlook by all major rating agencies is rare today and a quality that Sweden shares with only eight countries, Dagens Industi boasts.

In the past year, the krona has been the strongest of all the world's major currencies, according to news agency Bloomberg data reports Dagens Industri.
by Team

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