Swedish Riksbank Keeps 1.0% Repo Rate Level
July 3, 2013
The repo rate needs to remain low to support the economy and enable inflation to rise to the target of 2 per cent. Gradual increases in the repo rate are expected to begin during the second half of 2014, as assessed earlier.
The future repo rate path was not changed either after the latest Riksbank Executive Board policy meeting. A 1.0% level is projected through the third quarter of 2014, then rising to 2.0% by 3Q15 and 2.8% by 3Q16. In newly released forecasts included in today’s statement, GDP growth is projected at 1.5% this year, and core CPI inflation doesn’t quite climb back to the 2.0% target in 2015. There were dissents in today’s 4-2 vote by Ekholm and Flodin, each of whom sought a cut to 0.75% now and a somewhat lower rate path.
The next Executive Board meeting is scheduled September 5. The last repo rate change, a cut of 25 basis points in December 2012, culminated four such moves. The first three were implemented in November 2011, February 2012, and September 2012.
Copyright 2013, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Riksbank, Swedish monetary policy
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