Sweden to keep negative interest rate until 2018
Sweden’s central bank has unexpectedly decided to keep the country's main interest rate unchanged until at least the middle of next year, despite ballooning house prices.
The Riksbank said that the interest rate would remain at -0.5 percent, the same as the last update in February.
"The Swedish economy is growing stronger, but the Riksbank now estimates that it will take longer before inflation stabilises at around two percent,” said the central bank in a press release on Thursday. "Uncertainty about economic and political developments in the rest of the world remains high."
The bank also said it would increase the purchase of government bonds by SEK 15 billion, despite the opposition of three out of its six board members.
Both SEB and Swedbank’s chief economists call the decision surprisingly cautious.
Sweden has had negative interest rates since February 2015.