The skyline in Sweden

Sweden Monetary Policy February 2018

Sweden: Riksbank keeps rates unchanged in February

At its 13 February monetary policy meeting, the Riksbank decided to keep the monetary policy rate unchanged at a record low of minus 0.50%. It also announced that it will continue reinvesting redemptions and coupon payments from its bond portfolio until further notice. This means that the Bank’s holdings of government bonds will continue to increase temporarily, even though the QE program ended in December 2017.

The Bank’s decision came after inflation remained comfortably within the 1.0%–3.0% tolerance range in January, albeit slightly below the central 2.0% target. On the demand side, although the economy remains in good health—job creation continues at pace, the PMI is elevated, and firms and consumers are optimistic—there are no signs of overheating. House prices, which had increased sharply during 2015 and 2016, fell in Q4 of last year.

The Bank provided clear forward guidance in its communiqué, reiterating its expectation that interest rates will begin to rise in the second half of the year. However, any tightening is likely to be slow and moderate, particularly as the Riksbank revised down its inflation forecast for 2018 given slower-than-expected wage growth. The Bank is also likely to avoid tightening substantially more than the ECB, in order to avoid a strong appreciation of the krona.

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest