Swedish Riksbank

July 3, 2018

Sweden’s repo rate was kept at negative 0.50%, and a new statement¬†from the Executive Committee did not change previous forward guidance that a gradually rising trend is likely to begin late this year. One dissenting committee member wanted a 25-basis point hike now, and another favored saying such would occur in September or October. Projected inflation was bumped marginally higher for 2018 and 2019 but a tad lower in 2020, and in any case is seen hovering only at 2%, that is close to target. By gradual, officials mean very gradual, as their projected repo rate level two years from now is only at 0.57%. Global uncertainties are cited for the caution: tensions over trade, Italy’s political situation, and higher oil prices. The repo rate was first lowered to zero in October 2014, then cut 10 basis points in February 2015, 15 bps a month later, 10 bps in July 2015, and 15 bps in February 2016 to its present level.

Copyright 2018, Larry Greenberg. All rights reserved. No secondary distribution without express permission.



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