Swedish krona jumps after central bank action

Swedish krona rose against the dollar and the euro on Tuesday after the central bank left interest rates stable and supported stimulus measures to support an economy affected by the coronavirus pandemic.

The crown rose 0.4% against the euro to 10.7905, the highest since mid-March. Against the dollar, the krona jumped to a two-week high and last traded with a 0.7% increase to 9.9450.

With Sweden facing the worst recession since World War II, investors have been closely watching for any signs that Riksbank will lower rates below zero after it became the first central bank to abandon its interest rate cut policy at the end of last year.

But Riksbank left its base rate at 0%, as expected. Unlike most central banks around the world, he argues that it is better to focus on the supply of loans and counteract the increase in interest rates for households and companies.

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