JUST how long can the appreciation of the Nordic currencies last? When the Swiss National Bank (SNB) last year put in place measures to defend a floor in the euro-Swiss franc exchange rate, options for havens as the European debt crisis escalated were in short supply. For some, the Nordic currencies of Sweden and Norway seemed like the best route to take.

In a climate of constant policy-maker manipulation of currencies, the Riksbank governor held firm against pressures to weaken the Swedish krona. At the same time, Oystein Olsen, head of the Norges Bank, publicly stated that the Norwegian central bank had a policy of not intervening.

But this non-interventionist policy is now coming under some pressure. The Norwegian krone has risen over 6 per cent against the dollar so far this year and more than 4 per cent against the euro (see charts, below.) And as was the case when now-deposed SNB chairman Philipp Hildebrand implemented tough capital controls in an effort to halt the rise of the Swiss franc, both Sweden and Norway are feeling the burn as their respective currencies overheat. Swedish exports, upon which the country is highly dependent, fell by 6 per cent in December – nudging the Riksbank into cutting the base rate for the second straight month.

Oystien Olsten last year dissuaded investors from seeing the krone as a haven currency – warning that: “Investors must realise that the door is narrow when they want to leave the krone”– yet its appreciation against the other majors demonstrates that it has been treated as such. And in a risk-off environment, the lack of liquidity in the Nordic currencies that Olsten alluded to will come to hurt them.

Should the de facto haven inflows into the Nordics continue to dent exporting industries, don’t be surprised to see the respective central banks’ previously staunch non-interventionist policies crumble into the North Sea.