Sweden: Riksbank keeps rates on hold
February 13, 2014
At its 13 February monetary policy meeting, the Central Bank (Riksbank) announced that it would hold the repo rate unchanged at 0.75%. The decision, which met market expectations, followed the cut in the repo rate that the Bank made in December in an effort to stimulate the economy. The next monetary policy meeting will be held on 9 April.
The Bank stated that the economic outlook is improving amid increasing economic activity and the strengthening of labor market. According to Riksbank, the repo rate must be low in order to enable inflation rate to reach the target of 2.0%. Riksbank expects inflation to attain this target in 2015, therefore interest rate increases will not start until the beginning of next year.
Riksbank projects that the average repo rate will be 0.70% in 2014. FocusEconomics Consensus Forecast panelists see the repo rate at 1.23% in 2015.
Author: Dirina Mançellari, Senior Economist