Tuesday, December 20, 2011

Sweden's Riksbank Cuts Repo Rate 25bps to 1.75%

Sweden's Riksbank cut its benchmark repo rate by 25 basis points to 1.75% from 2.00%.  The Bank said: "There is still considerable uncertainty regarding the public-finance problems in, above all, the euro area and several euro countries are expected to implement more stringent fiscal tightening than was previously assumed. Growth in the euro area is therefore expected to be low in the period ahead. However, the global economy as a whole is growing at a relatively good rate."

The Riksbank previously increased the benchmark repo rate by 25 basis points to 2.00% at its July meeting, after also increasing by 25 basis points at its April meeting this year.  Sweden reported annual inflation of 2.8% in November, down from 3.2% in September, 3.4% in August, 3.3% in July, 3.1% in June, and 3.3% in May, the same as April, and up slightly from 2.9% in March; while also above the Riksbank's inflation target of 2.0%. 

Sweden's economy expanded 0.9% q/q in Q2 (0.8% in Q1), placing annual GDP growth at 4.9% (6.4% in Q1).  The Swedish Krona (SEK) has weakened about 3% against the US dollar so far this year, while the USDSEK exchange rate last traded around 6.89.

1 comment:

  1. It's a European central banking race to zero interest rates.. who will win?