Riksbank stays put, extends bond purchases

The Swedish central bank, the Riksbank, has left its key rate unchanged at -0.505 at its meeting today, matching previous estimates.

However, the central bank has decided to extend by SEK 15 billion its purchases of government bonds during the second half of the year, against some market expectations that were expecting the Riksbank to halt its QE.

The Riksbank now expects to raise its rates around mid-2018, a tad later that argued in the February’s statement, while it sees inflation taking longer to stabilize around the 2% target. The bank’s forecasts for inflation are somewhat lower for 2018 and 2019, while it stressed the importance of the accommodative policy in sustaining the upturn in inflation.