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Krona rises after Riksbank interest rate statement

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17:08 CEST+02:00
A statement from the Swedish central bank flagging further interest rate rises has caused the kronor to rise substantially in value, meaning Swedes travelling abroad over the Midsummer weekend are likely to feel a bit better off.

The Riksbank's decision on Wednesday to raise rates by 0.25 percentage points to 3.5 percent was expected. But the bank's prediction that further rate rises were likely took the currency traders by surprise.

The krona rose 12 öre against the euro, and stood at 9.25 kronor on Thursday at 2pm. The Swedish currency rose 11 öre against the dollar on Wednesday, falling back by one öre on Thursday. The krona now stands at 13.7 to the pound and 6.9 to the dollar.

"We haven't seen such big moves in the krona since the Enron crash of 2001, when the krona fell drastically," said Marcus Hallberg, analyst at Handelsbanken.

Hallberg said he thought the krona would keep strengthening and would reach 9.15 against the euro by the autumn.

Joakim Eriksson, marketing director at tour operator My Travel, said the rise of the krona was good for people living in Sweden who plan to travel abroad.

"It means that travellers will have more spending money in tourist destinations. The value of the krona has become an increasingly important factor when tourists choose where to spend their summer holidays."

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