Interest Rate in Sweden
Sweden - Interest Rate
The Riksbank maintains accommodative monetary policy stance in April, signals delayed rate hike and slower tightening
At its 25 April monetary policy meeting, the Riksbank left the repo rate unchanged at minus 0.25%, which was in line with market expectations. The Central Bank, however, struck a much more dovish tone in its April meeting than in its prior meeting, citing weak inflation in Sweden and abroad, low interest rates in major economies and an uncertain global backdrop as the principal reasons behind its cautious stance.
In March, inflation came in at 1.8%, representing the third consecutive month below the Bank’s 2.0% target. Moreover, the Riksbank now projects inflation to be softer both this year and over the medium-term than it had previously forecast. Likely feeding into these toned-down inflationary expectations were the Bank’s concurrently-trimmed economic growth forecasts.
Notably, the Bank signaled at its April meeting that accommodative monetary conditions would be in place for a longer period of time than what was expected in February. Consequently, the Bank now expects the next rate hike to be towards the end of the year or the start of next year, as opposed to in H2 2019. Furthermore, the Bank noted the pace of monetary policy normalization will likely be more gradual than previously thought—the Bank now sees the repo rate averaging 0.04% in Q2 2020 (February forecast: 0.23%) and 0.42% in Q2 2021 (February forecast: 0.73%).
In addition, the Riksbank announced its plan to continue quantitative easing, with purchases of government bonds at a nominal value of SEK 45 billion from July 2019 until December 2020. Two deputy governors, however, voiced concerns over the risks associated with additional purchases and whether they would meaningfully contribute to attaining the monetary policy target.
FocusEconomics Consensus Forecast panelists are taking into account the Bank’s latest move and revised repo-rate forecasts will be published on 30 April.
Sweden - Interest Rate Data
|Policy Interest Rate (%)||0.75||0.0||-0.35||-0.50||-0.50|
5 years of economic forecasts for more than 30 economic indicators.
Sweden Interest Rate Chart
|Bond Yield||0.06||-4.79 %||Jun 14|
|Exchange Rate||9.49||-0.20 %||Jun 14|
|Stock Market||1,590||0.14 %||Jun 14|
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June 4, 2019
According to Statistics Sweden, total industrial production excluding energy rose a seasonally-adjusted 1.3% over the prior month in April, recovering from the revised 1.9% fall logged in March (previously reported: -3.3% month-on-month).
May 28, 2019
The economic tendency indicator fell to 99.8 points in May from April’s revised 102.5 points (previously reported: 102.7 points), representing the lowest reading since April 2015.
May 14, 2019
The consumer price index (CPI) rose 0.7% in April compared to the previous month, up from 0.2% in March.
May 7, 2019
According to Statistics Sweden, total industrial production excluding energy fell a seasonally-adjusted 3.3% over the prior month in March, contrasting the revised 0.3% increase logged in February (previously reported: +0.4% month-on-month).
April 25, 2019
The economic tendency indicator rose to 102.7 points in April from March’s revised 101.9 points (previously reported: 101.7).