The Swedish krona has reached extreme lows against the dollar and euro, Some media are labelling it a "junk currency". Here's what that means for Sweden's international residents, and anyone pondering a move here.
The krona has reached lows usually only seen in times of economic crisis, most recently in 2009. It has been 17 years since the krona was this weak against the dollar, while it's at its lowest level against the euro in around a decade. At the time of writing, the krona was 9.58 against the dollar and 10.73 against the euro.
Export vs import
As Sweden is an export-orientated economy, the low krona can make Swedish companies more competitive, since their products become cheaper to buy than those in countries with the euro. For companies that rely on imports, though, there are higher costs to reckon with, and this affects many export-focused companies too.
In a survey by Swedbank, around half of purchasing managers for Sweden's 400 biggest companies said a fall in the krona had a negative impact on profits, while only a fifth said the effect was positive.
Compared to six years ago, a trip to a country in the eurozone is around 20 percent more expensive this year, a change that has been cited as a key factor in the rising popularity of 'staycations' in Sweden. There are exceptions: the Turkish lira is the only other OECD currency to have fallen further against the dollar this year, making Turkey a relatively cheap destination for Swedes.
Buying products online from overseas, for example from Amazon which does not currently operate within Sweden, becomes less good value when the krona is weak. Product prices in Sweden could rise too if companies are affected by higher cost of imports, including imported food and drink.
Source: thelocal.se
