MNI BRIEF: Riksbank's Floden - Hard Too See Krona Fall Further

Riksbank Deputy Governor Martin Floden said that while he agreed that typically the Swedish krona has weakened in times of heightened international uncertainty, he doubted that it would fall much more at present.

"Given that the krona is currently so weak I find it difficult to see that it will depreciate much more," he said in response to a question from MNI at a briefing.

Floden also played down the significance of the real equilibrium rate, or R star, for Riksbank policy setting, highlighting the uncertainties in assessing it and stressing that it changes over time. The Riksbank wants to hold the policy rate in restrictive territory which implies keeping rates above R star. "It is a moving target," Floden said, adding that there were signs that R star has moved higher.

In earlier remarks he noted that the weakness of the krona may be feeding through to higher than expected prices in goods and services which have a high import price component and that inflation remained far too high, despite the fall in the target CPIF measure to 4.0% in September from 4.7% in August.