29 Apr 2015
Sweden’s Riksbank leaves interest rates unchanged, expands QE program
FXStreet (Mumbai) - The Sweden’s Riksbank kept its Repo rate unchanged to a record low of -0.25%, contradicting the expectations of a further easing of 10 basis points.
Rate guidance
The Repo rate has been left unchanged at −0.25% but may be cut further. Slower increases in the repo rate are not expected to begin until the second half of 2016.
Expands QE program
The Executive Board of the Riksbank has decided to extend the purchases of nominal government bonds by a further SEK 40-50 billion. The purchases will be made during the period from May to the end of September and will comprise maturities of up to 25 years.
Inflation
Inflation has begun to rise partly due to the weakening of the krona over the last 12 months. Inflation expectations have also increased somewhat. The prices could rise further, however, it is uncertain how quickly this will happen, particularly given the fact that inflation has been lower than expected on several occasions. A weaker international economic activity or a rapid appreciation of the krona could also lead to inflation not rising fast enough. CPIF inflation is expected to reach 2% at the turn of the year 2015-2016.
Rate guidance
The Repo rate has been left unchanged at −0.25% but may be cut further. Slower increases in the repo rate are not expected to begin until the second half of 2016.
Expands QE program
The Executive Board of the Riksbank has decided to extend the purchases of nominal government bonds by a further SEK 40-50 billion. The purchases will be made during the period from May to the end of September and will comprise maturities of up to 25 years.
Inflation
Inflation has begun to rise partly due to the weakening of the krona over the last 12 months. Inflation expectations have also increased somewhat. The prices could rise further, however, it is uncertain how quickly this will happen, particularly given the fact that inflation has been lower than expected on several occasions. A weaker international economic activity or a rapid appreciation of the krona could also lead to inflation not rising fast enough. CPIF inflation is expected to reach 2% at the turn of the year 2015-2016.