Swedish Interest Rates at Record Low
Interest rates slashed by 1 percentage point have given Sweden its lowest rates ever. The Swedish Central Bank announced on Wednesday that the key interest rate will be cut by 1 point to a record low 1.0 percent. This marks the lowest official interest rates since the records began in 1907.
In a statement the bank warns that more troubled times loom ahead. The cuts are necessary in order to dampen the fall in production and employment and to reach the inflation target of 2%. According to the bank the interest rate may in fact have to be dropped further within the next 6 months.
Swedish homeowners are now waiting to see to what extent the cuts will influence mortgage rates.
However, the bank also forecasted that Sweden’s Gross domestic product would shrink by 1.6% instead of previously anticipated 0.5%. The Swedish krona fell significantly after the unexpectedly sharp cut in interest rates.