Monetary policy of Sweden
The main events in the monetary history of the Krona are:
- Introduction of the Krona, based on the gold standard on May 5, 1873. (1 kg of gold = 2480 Kronor)
- The tie to gold is abolished on August 2, 1914.
- The tie to gold is de facto re-established in November 1922.
- The tie to gold is de jure re-established on April 1, 1924
- The tie to gold is abolished once more on September 27, 1931. Floating exchange rate.
- A tie to the British pound is introduced in June 1933. (1 GBP = 19.40 SEK)
- Tied to the US dollar on August 28, 1939. (1 USD = 4.20 SEK)
- A controlled appreciation of 14.3%, against all other currencies and gold on July 13, 1946. (1 USD = 3.60 SEK)
- A controlled depreciation of 30.5% against the USD on September 19, 1949. (1 USD = 5.17 SEK)
- Membership of the International Monetary Fund and part of the Bretton Woods system on August 31, 1951.
- A controlled depreciation of 1.0% against gold and a 7.5% appreciation against the USD on December 21, 1971.
- A controlled depreciation of 5.0% against gold and a 5.6% appreciation against the USD on February 16, 1973.
- Membership in the European "currency snake" in March 1973.
- Adjustment of the exchange rates within the "snake"; a controlled 3% depreciation against the DEM on October 18, 1976.
- Adjustment of the exchange rates within the "snake"; a controlled 6% depreciation against the DEM on April 4, 1977.
- Sweden leaves the "snake". A controlled 10% depreciation against a trade based "currency basket" on August 29, 1977.
- A controlled depreciation of 10% against the "currency basket" on September 14, 1981.
- A controlled depreciation of 16% against the "currency basket" on October 8, 1982.
- A tie to the European Currency Unit is introduced unilaterally on May 17, 1991. (1 ECU = 7.40 SEK)
- Floating exchange rate on November 19, 1992.
In late 1992 (September 14, Monday) the British pound began a steep decline that made it "leave" the Exchange Rate Mechanism on the Wednesday of that week. At the same time the Swedish currency began to decline; the first reaction from the central bank was to try to keep the current fixed exchange rates in place, and they set a target for their equivalent to the federal funds rate ("marginal rate") at 500%. The bank began to sell short-term government securities in large amounts but soon realized that market forces were strong, so they lowered their target rate, and let everyone sell what they wanted to sell, and the country saw a large selling of SEK, and SEK denominated papers. Between September 1992 and February 1993 the Swedish currency "TCW" index went from 125 to 100 (20% fall), while the British currency XBP index fell from 200 to 142 (29% fall).
- Jonung, Lars "Från guldmyntfot till inflationsmål" [Ekonomisk debatt #1, 2000