The Prime Minister of Sweden, Fredrik Reinfeldt has clearly stated that the policy makers are not going to attempt any manipulations when it comes to the currency exchange rates, as of now. Hence, Swedish companies much adapt themselves to deal with the strong Krona (The major currency of Sweden) and come up with other ways for staying competitive in global market. Reinfeldt stated that the companies and investors, over time, should get used to deal with a strong currency, rather than asking for manipulating the same. Reinfeldt commented that his Government’s focus is more on lowering the corporate tax, spending on development, research and innovation, rather than thinking over ways to bring down Krona.
Off late, many countries across the world have started to make a push for weakening currencies so that the exports can be propped up and economic growth can be made faster. However, Sweden, so far, has refrained from participating in such actions. Krona is incidentally the best performer among all the major currencies across the world. It has surged ahead by 3.54% in 2013 against 10 of the developed markets.
Not only now, but even on previous occasions, the Government and Central Bank of Sweden have cleared the fact that they will not be interfering with Krona’s ascent. Last month, the Governor of Riksbank, Stefan Ingves stated that he is content with the current level of Krona. The main rate has been kept unchanged at 1% in last month. Apart from that, it has also been signaled that the borrowing costs will remain at same level as they see positive signs of a possible economic recovery.
Incidentally, Riksbank, home to retailer Hennes & Mauritz AB and truck maker Volvo AB, predicted that Swiss economy will expand by 1.2% in 2013, after experiencing a gain of 0.9% in 2012. It is also expected that the growth will jump to 2.7% in 2014. As far as the forecast of the European Commission is concerned, the Euro area economy may get contracted by 0.3% in 2013.
Reinfeldt acknowledged that fact that many countries are participating in currency manipulation practice. Hence, the currency prices are more driven by policies, rather than market data. Reinfeldt believes that this does not turn out to be good in the longer run and the prior experience of not only Sweden, but the entire Euro region, proves that.