Sweden Leaves Rates Unchanged


The central bank of Sweden left the repo rate on hold at -0.35 percent on September 2nd, 2015, following a 10bps cut in July, saying the economy is strengthening and inflation is rising. The central bank’s asset purchase program was also left unchanged.

Excerpts from the Statement by the Executive Board of the Riksbank:

Economic activity in Sweden is strengthening and inflation is showing a clear upward trend. Even though uncertainty continues to be high internationally, the economic outlook and inflation prospects remain largely unchanged since the monetary policy decision published in July. The Executive Board of the Riksbank has therefore decided to hold the repo rate unchanged at −0.35 per cent. The expansionary monetary policy, with a negative interest rate and the previous decision to purchase government bonds until the end of the year, is supporting the continued positive development of the Swedish economy so that CPIF inflation can be expected to be close to 2 per cent in 2016. The Riksbank remains highly prepared to make monetary policy even more expansionary in the event of inflation prospects deteriorating.

The expansionary monetary policy in Sweden is contributing to the continuing strengthening of economic activity and the gradual improvement of the situation on the labour market. Inflation has risen since last autumn and CPIF inflation was 0.9 per cent in July. Excluding energy, CPIF inflation amounted to 1.5 per cent. The trend of rising inflation is expected to continue. It is true that the fall in oil prices and the low electricity prices in Sweden will restrain CPIF inflation in the near future, but inflation is nevertheless expected to rise clearly. The forecast for the CPIF excluding energy remains basically unchanged from the Monetary Policy Report in July.

Inflation is rising, the Swedish economy is developing strongly and revisions to the forecasts are small overall. The Executive Board of the Riksbank has therefore decided to hold the repo rate unchanged at −0.35 per cent. In addition, the Riksbank will continue to purchase government bonds until the end of the year, according to the plan announced in July. The repo rate is expected to be −0.35 per cent for about one year, while the repo-rate path reflects the possibility of lowering the repo rate further.

Sweden Leaves Rates Unchanged


Riksbank | Joana Taborda | joana.taborda@tradingeconomics.com
9/3/2015 8:44:03 AM