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Nordic Update

Riksbank leaves repo rate unchanged

Publicerad: 27 april 2019, 19:49

As expected, the Riksbank decided to leave the repo rate unchanged at -0.25 per cent this week. Economic outlook appears gloomier than before and inflation seems to fall short of the target for some time ahead, forcing the Riksbank has reassessed its inflation forecast going forward.


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As economic outlook appears gloomier than before and inflation seems to fall short of the target for some time ahead, Swedish Riksbank has reassessed its inflation forecast going forward and indicated that a hike of the repo rate might be delayed until the end of this year or the beginning of 2020. As expected, the Riksbank decided to leave the repo rate unchanged at -0.25 per cent this week.

“Unexpectedly low inflation both in Sweden and abroad, low interest rates abroad and uncertainty over global developments emphasise that there is a need to proceed with caution in monetary policy. The Executive Board has decided to hold the repo rate unchanged at –0.25 per cent and assesses that the rate will remain at this level for a somewhat longer period of time than was forecast in February. The repo rate is expected to be raised again towards the end of the year or at the beginning of next year. Increases in the repo rate thereafter are expected to occur at a somewhat slower pace, compared with the assessment in February”, the bank writes in its press release.

Moreover, the bank’s executive board has decided to extend its QE programme and purchase government bonds for a nominal value of SEK 45 billion from July 2019 to December 2020.

“This corresponds to around half of the principal payments and coupons that the Riksbank will receive from the bond portfolio during this period. The purchases will take place in order to maintain an appropriate level of holdings and the Riksbank’s presence in the market,” the bank writes.

Sverrir Thór

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