Most modern studies of Swedish phonology take the view that the underlying vowel inventory of Central Standard Swedish comprises nine, rather than seventeen or eighteen, mutually contrasting vowel phonemes. A residual problem of a classic phonological type concerns the borrowed entities, rendered in traditional Swedish orthography as au and eu, whose ‘status in the vowel system is unclear’ (Riad 2014:42). The present paper scrutinizes earlier and current phonological interpretations of these entities, adduces evidence for and against each proposal, and concludes that the case for treating them as phonemic diphthongs /V͡V/, as /VC/-sequences, or as monosyllabic /VV̯/-sequences is weak and that they should in the first place be viewed as underlying heterosyllabic vowel sequences /VV/, subject to a special phonological stipulation valid for a borrowed sub-domain of the lexicon. Typologically, Central Standard Swedish should continue to be subsumed under the category of languages that lack phonological diphthongs.