Swedish Rate Hike
February 15, 2011
The Riksbank Executive Board has implemented a fifth repo rate increase of 25 basis points following similar increments last July 1, September 2, October 25 and December 15. The rate level becomes 1.5%, compared to a cyclical low of 0.25%. A statement released by the central bank cites the same four reasons for today’s move as given after the previous meeting in December:
- To stabilize CPI inflation near the 2% target
- To avoid excessive resource utilization
- To slow household borrowing, and
- To contain the risk of rising structural economic imbalances.
As in December, Board members Ekholm and Svensson dissented, preferring no rate hike now and recommending a repo rate path of rise to 3.25% by early 2014 instead of 3.6% as sought by the four-person majority. The new statement revises upward projected inflation and core inflation slightly and forecasts GDP growth of 4.4% this year, 2.4% in 2012 and 2.5% in 2013. Minutes of today’s meeting will be published at the end of this month.
Copyright Larry Greenberg 2011. All rights reserved. No secondary distribution without express permission.
Tags: Riksbank
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