Consequently, in an environment where everyone else is looking toward monetary tightening, Sweden has stuck with a loose policy, weakening its domestic currency on the global stage.
Nevertheless, the Riksbank is not without cause as inflation remains modest once volatile prices are taken into account and global trade is an ongoing concern – exports make up 45% of Sweden’s GDP.
Political risk may also be thrown into the mix as national elections are set on September 9, with the far-right party, which ran on a platform of anti-immigration and called for a Swedish exit from the E.U., is gaining steam.
For more information on Sweden, visit our Sweden category.