* Swedish debt office to start cutting long crown position
* Says crown could strengthen, but current level near normal
* Crown hits session low after announcement
(Adds analyst comment, market reaction, background)
STOCKHOLM, Sept 7 (Reuters) - Sweden's Debt Office said on Tuesday it would soon begin unwinding its roughly 50 billion crown ($6.92 billion) long position in the Swedish currency in a process expected to take up to a year.
The crown fell to a session low against the euro after the announcement and was at 9.32 at 0816 GMT.
The Debt Office said it aimed to start the unwinding of the position in the near future, depending on the prevailing market conditions.
"We believe that the Swedish krona could appreciate further from these levels, though we consider the current levels to be relatively normal," the debt office said in a statement.
"We are not targeting a best possible exchange rate. The position will be closed on many different levels."
In May last year, the government gave the Debt Office a mandate to buy up to 50 billion crowns in exchange for euros in the belief the Swedish currency was undervalued.
The Debt Office said that at that time it had bought Swedish krona against the euro through forwards at levels when the exchange rate varied between 10 and 11.50 to the euro.
Debt Office head Bo Lundgren has said on several occasions that the crown's normal level lies between 9.10-9.50 to the euro
"The unrealised profit of the position was by the end of August roughly 6 billion crowns," the Debt Office said.
Analysts said the dip in the crown from around 9.30 to the euro to 9.32 was probably temporary.
"The way we see it, the reaction is short term," said Jenny Mannent, current strategist at Handelsbanken. "Over a one-year horizon, the market can swallow this sum without any problems."
(Editing by Stephen Nisbet)