The weak status of the Swedish krona has often been pointed out as the driving factor behind Riksbanken's interest rate increases.
The main reason why I believe that Sweden's central bank AKA Riksbanken will raise the policy rate is the statement that Erik Thedéen made during the last interest rate meeting.
The members of Riksbanken themselves stated at the last interest rate meeting that the weak krona is a significant risk factor for increased inflation.
But at the same meeting, a possible mistake on the part of the authority was also raised, namely that Riksbanken may have misjudged the real effect of a weak krona.
Quote "a lot of evidence suggests that the impact from a weak exchange rate to rising inflation may be greater than we previously expected" unquote and quote "it represents an upward risk for our inflation assessment" unquote says Erik Thedéen according to the meeting minutes.
The same protocol also mentions quote "so that we can reach our inflation target within a reasonable time, it is therefore important that the krona is not further weakened" unquote by Erik Thedéen.
So even if Riksbanken itself is aware that misjudgments may have been made, I am convinced that Erik Thedéen and Riksbanken will follow through on their plan just to appear secure and confident in their positions.
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