Swedish Riksbank

September 5, 2013

The six-person Executive Board again left its 1.0% repo rate unchanged in a 4-2 vote with both dissents favoring a 25-basis point rate cut now and lower future favored rate path.  The majority considered by rejected the more accommodative stance.  According to its latest statement,

An even lower repo rate could lead to inflation attaining the target slightly sooner. However, at the same time, a lower repo rate now, when the situation for households is already relatively favourable, could lead to a further increase in the risks related to high household debt.

The repo rate has been 1.0% since the final of four 25-basis point cuts in December 2012.  Earlier reductions were implemented in December 2011 and February and September of last year.  The Board has a 2% inflation target but projects total CPI and core CPI this year at 0.1% and 1.0% followed by 1.3% and 1.4% in 2014.  The majority still thinks the likeliest future path for the repo rate puts such at 1.0% through end-2014, 2.0% on average in the summer quarter of 2015 and 2.8% on average in the third quarter of 2016.

The next policy meeting is set for October 23.  Minutes of the latest meeting arrive September 18, same day as the Bernanke press conference.

Copyright 2013, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



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