Swedish central bank keeps rate stagnant as inflation and economic growth levels remain weary
Wednesday, 03 July 2013
Swedish central bank, the Riksbank, has left the key interest rates unchanged as most players in the economy and the markets had everyone expected.
In a press release, the Riksbank writes that the Swedish economy is on
the way to a recovery. At the same time, inflation is expected to be
low for a while longer. Economic developments in Sweden and abroad have
been largely in line with the Riksbank’s most recent forecast in April.
Therefore, the repo rate needs to remain low to support the economy and
enable inflation to rise to the target of 2 per cent. The Executive
Board of the Riksbank has therefore decided to hold the repo rate
unchanged at 1 per cent. Gradual increases in the repo rate are
expected to begin during the second half of 2014, as assessed earlier,
the bank writes.
Economic developments around the world are in different phases. In the
United States, GDP is continuing to grow at a modest pace, while
developments in the euro area are weak. Several euro area countries
need to implement major reforms, which will take many years, although
there are signs that developments are moving in the right direction.
Moreover, there are good conditions for an increase in growth in the
United States. The economic outlook abroad as a whole is expected to
improve gradually over the coming years, writes the Riksbank.