BIS central bankers’ speeches  11  Figure 8 Sweden’s net external position and accumulated current accounts Percentage of GDP  80  80 Accumulated current accounts Net external position  60  60 Nominal net external position  40  40  20  20  0  0  -20  -20  -40  -40  -60  -60 75  77  79  81  83  85  87  89  91  93  95  97  99  01  03  05  07  09  Sources: Statistics Sweden and the Riksbank  If it is the case that Sweden has no particularly large net claim internationally then this will have some significance for the prospects for the real exchange rate. In theory, countries with a strong external position should in the long term experience appreciating real exchange rates, and vice versa. There is also empirical support for the link between the net position and real exchange rates when studying different countries. 24 With a net claim close to zero one would not necessarily expect any strengthening of the real exchange rate despite a large current account surplus. The fact that Sweden’s external position appears to be close to zero suggests that there is no need for the real exchange rate for the krona to move in any particular direction for this reason. Other factors also affect the real exchange rate, for example relative GDP growth, relative inflation and the terms of trade.
5  The current account mainly consists of the difference between exports and imports of goods and services. Net capital income and various charges paid to and received from abroad are also included, but these components usually account for a much smaller part of the total than net exports. 6  For a more detailed discussion, see Lane, 2010. 2  BIS central bankers’ speeches  Figure 1 Current accounts, private net capital and GDP in eastern and central Europe Percentage of GDP and annual percentage change 15  15 GDP Current account Private capital  10  10  5  5  0  0  -5  -5  -10  -10 80  82  84  86  89  91  93  95  97  99  01  04  06  08  10  Note. Private capital is made up of direct private investment (net), private portfolio flows (net) and other private capital (net flows), expressed here as a share of GDP. Source: The IMF  Global imbalances have increased since the deregulation of the capital markets at the end of the 1980s. One of the reasons for this is that countries with surpluses, such as China, have grown more rapidly than other countries. The higher rate of growth means that China’s savings surplus (the difference between saving and investment) has increased as a percentage of global GDP.