Swedish Krona Declines After Exporters Complain of Earnings DropNeal Armstrong
Sweden’s krona fell from the strongest level in four months against the euro as exporters voiced concern that the currency’s recent appreciation was eating into earnings.
Sverker Martin-Loef, chairman of Swedish companies including SSAB and Industrivaerden, said the Riksbank’s monetary policy was making the krona stronger than it should be. Fagerhult AB, a Swedish maker of lighting systems, said in an earnings statement released today that the currency’s appreciation had lowered profit.
The krona has risen 6.8 percent in the past year, the most among 10 major peers tracked by Bloomberg, as investors attracted by economic growth forecast to rise 1.2 percent this year sought a haven from the euro-area crisis. It climbed to the most since Oct. 1 versus the euro yesterday after Swedish Finance Minister Anders Borg said businesses in the largest Nordic economy need to accept the krona’s advance, predicting it will stay strong for a “couple of years.”
“The smaller exporters who sell into the euro zone do face a problem here,” said Richard Falkenhall, a currency strategist at SEB AB in Stockholm. “Big exporters are fairly relaxed when it comes to the krona because they have become more globalized.”
The krona depreciated 0.3 percent to 8.4595 per euro at 2:23 p.m. London time and weakened 0.4 percent to 6.3349 per dollar. It declined versus most of its 16 major peers.
The Riksbank kept its key rate at 1 percent on Feb. 13, when chairman Stefan Ingves said the krona’s appreciation has brought it to an appropriate level. The central bank maintained its growth forecasts this week, predicting the Swedish economy will expand 1.2 percent this year, consumer prices will remain below the 2 percent target until 2015 and unemployment will ease in 2014.