Swedish Riksbank Expands Quantitative Easing

April 29, 2015

A SEK 10 billion program of bond buying was introduced by Swedish monetary authorities in February, expanded by an additional 30 billion kronor in March, and now again raised by another SEK 40-50 billion, bringing the total size of the initiative to SEK 80-90 billion.  At this month’s meeting, moreover, the repo rate, which had been cut to zero last October, then to -0.10% in February and -0.25% last month was retained at that level with the caveat that officials stand ready to cut the interest rate further in the future.  They did lower the projected path of the interest rate such that it is only at 0.78% in the second quarter of 2018, some three years from now.  They also warned that other tools, including foreign exchange intervention may be deployed to assist returning inflation to target.  The statement doesn’t mention any dissenting votes.

Copyright 2015, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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