Interest Rate in Sweden
Sweden - Interest Rate
Riksbank leaves the repo rate unchanged in October but points to a December hike
At its 24 October monetary policy meeting, the Riksbank left the repo rate unchanged at minus 0.25%, as had been widely expected. Surprising market analysts, however, the Central Bank said the interest rate “will most probably be raised in December” to 0.00%, which is more hawkish than the remark given at its last monetary policy meeting in September, which pointed to a rate rise “towards the end of the year or at the beginning of next year”.
Inflation with a fixed interest rate (CPIF)—which is closely followed by the Riksbank—held steady in September at 1.3%, which is at the lower end of the Central Bank’s tolerance band of 1.0%–3.0%. However, despite this, the Central Bank expects CPIF inflation to pick up: According to its new forecasts, it is seen averaging 1.8% in 2020, which is up 0.1 percentage points from its previous forecast, and 1.8% again in 2021, which is unchanged from its previous forecast.
In terms of economic growth, the Riksbank lowered its 2020 forecast to 1.2% from 1.5%, and its 2021 forecast to 1.6% from 1.9%. Rather than letting a foreseen slowdown put it off raising the repo rate, though, the Riksbank said “the slowdown implies a normalization of an economic situation that has been strong for many years with high growth and favorable development on the labor market”.
As such, the Central Bank penciled in a repo rate rise to 0.00% in December. Looking further ahead, the Central Bank said the repo rate will likely be “unchanged for a prolonged period after the expected rise in December.”
Commenting on this monetary policy development, James Smith and Petr Krpata of ING said: “The Riksbank is sticking to its December rate hike amid a deteriorating economic backdrop, signaling a clear willingness to exit negative rates. Policymakers have said rates could fall again if the outlook worsens, but this latest guidance coupled with a more relaxed attitude towards the risk of SEK appreciation, suggests a high bar for easing.”
FocusEconomics Consensus Forecast panelists are currently revising their forecasts and new forecasts will be available on 19 November.
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||0.15||-4.79 %||Jan 01|
|Exchange Rate||9.36||-0.20 %||Jan 01|
Get a sample report showing our regional, country and commodities data and analysis.
Request a Trial
Start working with the reports used by the world’s major financial institutions, multinational enterprises & government agencies now. Click on the button below to get started.
January 15, 2020
Consumer prices increased 0.4% in December from the previous month, up from the 0.1% increase in November and partly due to more expensive transport prices.
January 10, 2020
Total industrial production excluding energy increased 2.1% in November in seasonally- and calendar-adjusted terms, contrasting the revised 1.7% decrease in October (previously reported: -1.8% month-on-month).
December 18, 2019
The economic tendency indicator decreased to 93.3 points in December, down from the revised 94.6-point reading in November (previously reported: 94.7 points).
December 11, 2019
Consumer prices increased 0.1% in November, up from the flat reading in October, and partly due to more expensive housing, water, electricity, gas and other fuels, which more than outweighed cheaper transport prices.
December 6, 2019
Total industrial production excluding energy decreased 1.8% in October in seasonally- and calendar-adjusted terms, down from the 1.0% moderation in September.