Riksbank warns on readiness to intervene in FX market

Riksbank just issued a blunt warning to traders and investors, who according to the bank, is not paying attention or taking Riksbank's commitment seriously, saying that it wouldn't hesitate to intervene in the FX market if deemed necessary.

Last month, central bank unleased fresh easing measures by adding another 6 months to its current SEK 65 billion worth of bonds and suggesting that it stands ready to do more if necessary. However that did little to weaken Krona against Euro, as market expects bigger bazooka from European Central Bank.

Swedish economy is very closely linked to Euro zone, via its exports and tend to lose out if Krona strengthens against Euro sharply.

Both the governor and his deputy worried that market participants are not taking the commitment seriously.

While Krona in past 12 months, has fallen close to 17% against the Dollar, it is down just about 1% against Euro. Traders and investors has recently been shorting the Euro against Krona, expecting that the Riskbank wouldn't be able to keep up pace with European central bank.

Nevertheless, commentaries from Riksbank suggest, there could be heavy intervention post December ECB.

Euro is currently trading at 9.331 against Krona, down -0.1% today so far.