Inflation in Sweden is higher than in Switzerland, and the Swedish Riksbank has also lowered its key rates to 3.25%. This is the third key rate cut of 2024, and the monetary authorities in Stockholm have made it clear that it will not be the last. In August, inflation fell sharply to 1.9%, which is within the targets set by the central bank for the first time since Summer 2021.
Therefore, it takes advantage of the situation to standardise the cost of credit as quickly as possible, a key tool for economic recovery in a country with heavily indebted consumers.
Nevertheless, we must be careful not to widen the rate differential that separates Sweden from the eurozone or the United States too much. At this stage, the Swedish Krona (SEK) remains significantly undervalued against both reference currencies.
If SEK loses its « colour », it could risk a strong rebound in inflation through the prices of imported products. This is all the more plausible given that the lower cost of credit should boost private demand.
We are not investing in Sweden at this time.