No information on how the crown will be saved

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Published 31 January 2023 at 11.52

Economy. Riksbank Governor Erik Thedéen left vague information about what he intends to do about the weak Swedish krona when he was questioned in the Riksdag today. He only stated that the development was not welcome.

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One euro costs 11.33 kroner today and many expected clear information about what the Riksbank intends to do about this, not least when the weak krona raises import prices and drives up inflation.

But when Erik Thedéen spoke in the Riksdag today did not make any direct announcements in this area.

– The development of the krona as it has been in the last year, two years, it is not welcome when it comes to fighting inflation, he says in the finance committee.

The governor of the Riksbank asks to come back to the issue in connection with the interest rate announcement on 9 February.

– Exactly how we look at it and in what way it affects, I want to come back to in a separate order.

Thedéen also warned the politicians to pause the amortization requirements for mortgages, because high indebtedness among the real estate industry and households makes the Swedish financial system vulnerable.

He believes that the amortization requirements should remain and advises the politicians to trust that banks and mortgage borrowers can deal with the problems.

– If you remove the amortization requirement, amortization-free loans will arrive like a letter in the mail. Hold on to this now, Thedéen tells the politicians.

Susanna Grufman, Acting Director General of the Financial Supervisory Authority, agrees and says that there is no reason for a general amortization break.

Erik Thedéen points to the uncertain economy, with rising inflation, interest rates and indebtedness, as a cause of concern for financial stability. He says that the weak Swedish krona is not welcome.