Sweden: Riksbank maintains repo rate at 1.25%
October 25, 2012
At its 25 October monetary policy meeting, the Central Bank (Riksbank) left its repo rate unchanged at 1.25%, in a move that was in line with market analysts expectations. According to the Bank, the decision aims to stimulate the economy so that inflation rises towards the target of 2 per cent. Riksbank stated that growth in the euro area continues to weaken, dampening demand for Swedish exports. Nevertheless, the Bank stressed that the Swedish economy remains resilient despite the ongoing debt crisis in Europe, alleviated to some extent by the relatively good purchasing power of Swedish households. Regarding price developments, Riksbank acknowledged that inflation remains low due to low cost pressures in recent years and earlier strengthening of the krona. Indeed, the Bank expects inflation to remain below its target of 2.0% in both 2012 and 2013.