Swedish Repo Rate Kept at -0.50%
July 6, 2016
The Swedish Riksbank introduced a negative interest rate of -0.10% in February 2015 cut such subsequently at three later meetings: by 15 bps in March 2015, 10 bps in July 2015 and, most recently by 15 bps in February of this year. Officials complement the negative interest rate with quantitative stimulus (QE) via bond buying, and according to a statement released after today’s policy review said that QE would continue through the second half of 2016 and revised down projected core inflation to 1.8% in 2017 and 2.0% in 2018 as well as GDP growth forecasts to 3.6% this year followed by 2.2% in 2017. The statement repeats a pledge to ease further if needed, and laid out a flatter upward repo rate path that doesn’t start until sometime between the third quarters of 2017 and 3Q18 and that only reaches marginally above +0.50% as late as the third quarter of 2019. One policymaker, Floden, dissented against today’s decisions.
Copyright 2016, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Swedish Riksbank
ShareThis
