Central Bank keeps interest rate at minus 0.35 percent
The Swedish Central Bank announced Tuesday that it will leave the record-low key interest rate unchanged, at -0.35 percent.
Reuters reported that the decision was expected by most economists it surveyed, and immediately following the bank's announcement, the Swedish krona got stronger in relation to the US dollar and to the Euro.
Governor of the Swedish Central Bank (the Riksbank) Stefan Ingves told Swedish Radio News that the key interest rate will likely only be raised in 2017. He said:
"We believe Sweden will experience very positive growth in the coming years and we don't think that is an overestimate. When demand is healthy, prices will rise and we will reach our inflation target of 2 percent. It will take a while before we get there so therefore it will only be time to raise the interest rate in 2017."
A statement on the Swedish Central Bank website said:
"To safeguard the resilience of the upturn in inflation, monetary policy needs to remain very expansionary. The Executive Board of the Riksbank has therefore decided to hold the repo rate unchanged at -0.35 per cent. Purchases of government bonds will continue for the first six months of 2016 as was decided in October. The Board is also highly prepared to make monetary policy even more expansionary, even between the ordinary monetary policy meetings."