Central Bank keeps repo rate at -0.5%

5:57 min

The head of Sweden's Central Bank Stefan Ingves announced Wednesday, that the country's key interest rate will remain unchanged, at -0.5%, which it has been since February this year.

Anxiety over uncertainty caused by international events, like the Brexit vote, has caused the Central Bank to take a more cautious approach to setting the repo rate, keeping it in the negative. The low repo rate, coupled with a highly expansionary monetary policy, are strategies the Central Bank hopes will support the Swedish economy and push the country's inflation rate to rise to two percent, according to Ingves.

While he said the Swedish economy is in relatively good shape and is expected to continue growing, he added that one downside to a negative repo rate is that it can exacerbate the problem of high household debt in the country. But he said, that is a problem that needs to be solved by other government agencies.

For now, the Central Bank does not expect to raise the repo rate above %0 until partway through 2018, with slow increases to begin in the second half of 2017.