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Sweden |
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The Sveriges Riksbank (the Central Bank) administers currency matters and regulates foreign exchange controls through its Exchange Control Board. Authorized banks and some other authorized agencies implement the exchange control regulation.
The currency of Sweden is the Sweden Krona. Following the devaluation of U.S. Dollar, Krona devalued and the gold content of Krona reduced. At the end of 1971, Sweden established an Effective Rate with a fluctuation rate of 4.5%.
From 1977 to 1991, the Krona was pegged to a trade-weighted basket of foreign currencies. The Sveriges Riksbank is guided by a trade-weighted index based on a basket of 15 currencies of Sweden's most important trading partners. The weights are proportional to Sweden's foreign trade with each of the countries whose currencies are included in the index, with the exception that the weight of the U.S. Dollar has been doubled. To take account of changes in average trade shares, the weight are adjusted accordingly on the basis of trade statistics for the last five calendar years. The exchange rate is managed so as to allow only limited fluctuations around the benchmark of Effective Rate, and the daily index values is published weekly by Riksbank. For example, in 1985, the fluctuations in the spot rate were limited to 1.5% on either side of an announced benchmark.
From mid-1991 the Krona was in the European Exchange Rate Mechanism (ERM). The Krona was pegged to the European Currency Unit (ECU) instead of a trade-weighted basket. The Krona was allowed to float in November 1992 after briefly defending the Krona during the turbulence in European financial markets. Although Sweden is a EU member, it has chosen not to join the European Monetary Union and does not currently participate in the ERM.
Major sources of reference include:
1) World Currency Yearbook (WCY)
2) IMF Annual Report on Exchange Arrangement and Exchange Restriction (IMF)
3) 1996 Country Reports on Economic Policy and Trade Practices
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Date
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Changes
to the exchange rate regime
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Swedish Krona per U.S. Dollar
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| 20 September 1949 | Following the Sterling devaluation, Sweden reduced the Official Rate of the Krona from SKr3.60 to SKr5.17 per U.S. Dollar. (WCY 1984, p.703) | | | 23 August 1971 | Following the devaluation of the U.S. Dollar on 15 August, the Krona was given a controlled float above its fluctuation limit of SKr5.135 per U.S. Dollar. (WCY 1984, p.703) | | | 21 December 1971 | The gold content of the Krona was reduced 1% because of the devaluation of U.S. Dollar; the Official Rate was changed to SKr4.1829 per U.S. Dollar.
The fluctuation range was widened to 4.5%, and an Effective Rate, with limits set at SKr4.705/4.920 per U.S. Dollar, was established. (WCY 1984, p.703) | | | 15 February 1973 | U.S. Dollar devaluation in February 1973, the Krona's gold content was reduced by 5%, thus devaluating the Official Rate to SKr4.56 per U.S. Dollar. The fluctuation limits for the Krona were set at SKr4.4575/4.6625 per U.S. Dollar. (WCY 1984, p.703) | | | 19 March 1973 | The Effective Krona was set free to float against the U.S. Dollar, and at the same time, was joined to a concerted float en bloc with the currencies of Belgium, Denmark, France, West Germany, Luxembourg, Netherlands and Norway. These units were linked by maintenance of a 2.25% fluctuation range against one another. (WCY 1984, p.703) | | | 31 December 1974 | | 4.080 | | 1975 | A central rate of SKr4.56=US$1 has been established. Margins of 2.25% are maintained for spot rates in the official exchange market between the Swedish Krona and the Belgian Franc, Danish Krone, the Deutsche Mark, French Franc, Luxembourg Franc, Netherlands Guilder, and the Norwegian Krone. No announced margins are maintained for other currencies. (IMF 1976, p.424) | | | 31 December 1975 | | 4.390 | | 1976 | | 4.390 | | 18 October 1976 | The Swedish Krona was devalued 2.94% in terms of gold with the Official Rate altered to SKr4.698 per U.S. Dollar. (WCY 1984, p.703) | | | 30 December 1976 | | 4.130 | | 4 April 1977 | The currency was devalued 6% in terms of gold, thus changing the Official Rate to SKr4.998 per U.S. Dollar with the fluctuation limits adjusted accordingly. (WCY 1984, p.703)
The Riksbank changed its intervention points against the currencies in the European common margins arrangement. The new currency value of the Krona, used as a numeraire for establishing intervention points, corresponded to SKr5.91118=SDR1. (IMF 1978, p.390) | | | 29 August 1977 | Sweden has not maintained the exchange rate within margins of 2.25%. (IMF 1978, p.390)
The Swedish Krona was withdrawn from the intra-European currency float, the unit's Effective Rate depreciated 10% and linked to a basket of 15 currencies of major trading partners, i.e. the West Germany Mark, Netherlands Guilder, Belgian Franc, Danish Krone, Norwegian Krone, French Franc, Finnish Markka, Austrian Schilling, Spanish Peseta, U.K. Pound Sterling, Swiss Franc, Italian Lira, Japanese Yen, Canadian Dollar and U.S. Dollar. In addition, the weights attached to the currencies in the basket are periodically changed. (WCY 1985, p.782) | | | 30 December 1977 | | 4.670 | | 29 December 1978 | | 4.300 | | 1979 | The index value of 100 represents the benchmark for the effective value following the devaluation of on 29 August 1977. The exchange rate is managed so as to allow only limited fluctuations around the benchmark and the daily index values is published weekly by Riksbank. (IMF 1979, p.385) | | | 28 December 1979 | | 4.147 | | 30 December 1980 | | 4.373 | | 10 April 1981 | The Bank of Sweden revised the weights attached to 6 of the 15 currencies in the composite to which the Swedish Krona was pegged. The revision involved an increase in the weights for the U.S. Dollar, Finnish Markka, French Franc, and Italian Lira and a decrease in those for the Danish Krona and Norwegian Krona. (IMF 1982, p.416) | | | 14 September 1981 | The Effective Rate was devalued 10% in relation to the composite of 15 currencies. The new benchmark for the basket became 111 (based on 29 August, 1977 = 100). In connection with decision to devalue the Krona, an interval of 107-111 was established which allowed the Riksbank to change the benchmark; any such change will be announced officially by the Riksbank in advance. (IMF 1982, p.412) | | | 31 December 1981 | | 5.571 | | 8 October 1982 | The Effective Rate was devalued 15.9% against the linked basket of currencies. (WCY 1985, p.782)
The Sveriges Riksbank increased the benchmark of the currency index from a level of 111 to 132 (August 1997 = 100). This represented a devaluation of the Krona of 15.9%. (IMF 1983, p.443) | | | 30 December 1982 | | 7.295 | | 31 December 1983 | | 8.000 | | 1 April 1984 | The Bank of Sweden announced new weights for 12 of the 15 currencies in the basket peg for the Sweden Krona, on the basis of the average share of each country in Sweden's foreign trade over the preceding five calendar years. (IMF 1985, p.470) | | | 31 December 1984 | | 8.990 | | 18 March 1985 | Authorization was granted for foreign banks to open subsidiaries in Sweden. (IMF 1986, p.483) | | | 1 April 1985 | To take account of changes in average trade shares, the weights are adjusted on the basis of trade statistics for the last five calendar years. (IMF 1986, p.481) | | | 27 June 1985 | The fluctuations in the spot rate were limited to 1.5% on either side of an announced benchmark. (WCY 1986/87, p.683) | | | 30 December 1985 | | 7.616 | | 30 December 1986 | | 6.819 | | 1 February 1987 | All foreign exchange transactions, spot and forward, were permitted without restriction, provided that they take place through an authorized bank. Authorized banks were allowed to enter into forward contracts for periods exceeding 12 months with nonresidents. (IMF 1988, p.460) | | | 30 December 1987 | | 5.848 | | 30 December 1988 | | 6.157 | | 19 January 1989 | The Investment Currency Krona, resulting from the foreign exchange proceeds of sales of foreign securities owned by residents, was abolished. (WCY 1990/93, p.750) | | | 29 December 1989 | | 6.227 | | 1 July 1990 | Exchange controls regulations were abolished. All current payments are free of exchange control, provided that they are made through currency traders in accordance with the Sveriges Riksbank Act. (IMF 1991, p.475) | | | 31 December 1990 | | 5.698 | | 17 May 1991 | The peg of the Swedish Krona was changed from a trade-weighted basket to a basket based on the European Currency Unit (ECU), with a fluctuation range of plus or minus 1.5% of a central rate of SKr7.40054=ECU1.00. (WCY 1990/93, p.750) | | | 31 December 1991 | | 5.530 | | 19 November 1992 | The peg to ECU was broken and the Krona's Effective Rate was to float freely based on supply and demand in the exchange market, with the Central Bank having intervention rights. (WCY 1990/93, p.750) | | | 1 January 1993 | The requirement that all current and capital transactions must be conducted through authorized currency dealers were abolished. (IMF 1994, p.485) | |
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