STOCKHOLM, June 15 - Sweden's central bank, the Riksbank, announced it had intervened on the currency market on Friday with a view to strengthing the Swedish crown. The bank said the intervention was based on a decision taken by the Executive Board of the bank on June 14.
"One of the measures available to the Riksbank is currency-market intervention," the bank said in a statement.
"This can be particularly motivated if pricing in the currency market deviates markedly from what can be considered fundamentally appropriate and if the price is moving away from what is fundamentally appropriate in a process that is liable to become self generating."
Traders said they believed the bank had intervened at 0910 GMT at the level of 9.19 crowns to the euro. They said the intervention might create short term uncertainty that would undermine the currency in the longer term.
"If you look at history it's seldom that you suceed in making these interventions," said Robert Bergqvist, chief currency analyst at SEB.
"I am quite doubtful that this intervention will be successful."
The bank said it would make a complete assessment of inflation and the consequences for monetary policy at the Eexecutive Board meetong on July 5.
Earlier on Friday the bank's Deputy Governor Lars Heikensten said in a speech that long term weakness in the Swedish crown was having an impact on inflation which could prompt direct intervention.
Statistics Sweden on Thursday released headline CPI numbers for May which were up 0.7 percent compared with April and up 3.0 percent year-on-year -- higher than analysts had expected.
According to a poll, analysts had expected a 0.5 percent increase month-on-month and a 2.8 percent rise year-on-year.