Nordic Currencies: Sweden's Krona Rises as Riksbank Lifts Rates

By Bo Nielsen

Sept. 4 (Bloomberg) -- Sweden's krona advanced after the Riksbank raised interest rates a quarter-point to 4.75 percent to curb inflation.

The Stockholm-based central bank today lifted rates for a third time this year, matching the median estimate of 23 economists surveyed by Bloomberg News. Eight of the analysts predicted the bank would keep rates on hold.

``A more bullish rates picture will boost the krona,'' said John Hydeskov, a senior analyst at Danske Bank A/S, Denmark's biggest lender, before the decision.

The Swedish krona rose 0.2 percent to 6.5237 against the dollar by 9:35 a.m. in Stockholm, from 6.5384 yesterday. It was at 9.4924 per euro, from 9.4792 yesterday.

The Swedish inflation rate climbed to 4.4 percent in July, the highest in 15 years and more than double the 2 percent central bank target. The economy grew an annual 0.7 percent in the three months through June, the slowest pace in seven years

Swedish government bonds fell, with the yield on Sweden's 5.25 percent note due March 2011 gaining 5 basis points to 4.28 percent. Yields move inversely to bond prices.

To contact the reporter on this story: Bo Nielsen in Copenhagen at bnielsen4@bloomberg.net