Swedish central bank, the Kiksbank leaves Repo rate unchanged at 1 per cent
Thursday, 24 October 2013
The Swedish central bank or the Riksbank announced that it has decided to hold the repo rate unchanged at 1 per cent.
According to a press release the bank said following the slowdown in
recent years, the outlook for the Swedish economy is brightening. There
has been some improvement in the labour market and this is expected to
become clearer during 2014. At the same time, inflation is low.
For that reason, the Executive Board of the Riksbank has decided to
hold the repo rate unchanged at 1 per cent, to enable inflation to rise
towards 2 per cent and to support the economic upturn. The repo rate
needs to remain at this low level until economic activity is stronger
and inflation rises. As before, the repo rate is not expected to be
raised until the end of 2014.
The bank posit that there is good prospects of an upturn in the Swedish
economy. It said that economic developments in Sweden and abroad have
been largely in line with the Riksbank's forecasts for some time now.
There are signs of an improvement in the euro area and the recovery in
the United States is continuing. However, major challenges still
remain. The political disagreement in the United States over fiscal
policy is one source of uncertainty, as are the effects of the Federal
Reserve's tapering of its asset purchases. Despite a slightly more
subdued development in several emerging markets, the world as a whole
is expected to grow at a relatively good rate during the coming
The recovery abroad will contribute to brighter prospects for the
Swedish economy. Sentiment among households and companies has gradually
risen, at the same time as there has been some improvement in the
labour market. Low interest rates and an expansionary fiscal policy
create the conditions for stronger consumption among households in the
coming period. Growth in Sweden is thus expected to be gradually
higher, which means that employment will rise at a faster pace and
unemployment will fall.
News source is based on press release from Riksbanken and more details could be obtained here
By Scancomark.com Team