BusinessSwedish krona tumbles to worst levels against dollar in 16 years – The Local SwedenBy admin - February 19, 201955288ShareFacebook Twitter Google+ Pinterest WhatsApp The Swedish krona fell to its lowest level against the US dollar in 16 years on Tuesday. Photo: Fotograferna Holmberg/TT file pictureA lower-than-expected inflation rate on Tuesday saw the Swedish krona slump to its worst levels against the US dollar in 16 years, fuelling fears that Sweden’s Central Bank will be unable to flip the country’s negative repo rate into positive territory any time soon. The krona took a hard beating when Statistics Sweden announced that the Swedish inflation rate (CPIF) had fallen to 2.0 percent in January from 2.2 percent a month earlier – well below the Central Bank’s forecast, which had expected it to land at 2.4 percent. The krona immediately weakened on the news, coming in at 10.41 against the US dollar and 10.61 against the euro in noon trading, as investors saw it as a signal that Sweden will not be able to increase its borrowing costs any time soon. “It’s a reaction to the fact that it will be very difficult for the Central Bank to hike the repo rate this fall,” Annika Winsth, chief economist at Nordea, told Swedish daily Dagens Nyheter. The inflation data followed slowed January retail sales and a slump in Swedish consumer confidence. “We’re in a spiral in which all the advantages we enjoyed when Sweden was doing better than other countries have been wiped away, and then we have an inflation coming in lower than expected and a Central Bank signalling that [a repo rate increase] will take a while […] and now the market thinks it will take even longer,” Winsth said.