Wednesday, September 7, 2011

Swedish Central Bank Holds Repo Rate at 2.00%

Sweden's Riksbank held its benchmark repo rate unchanged at 2.00%.  The Bank said: "The concern over public finances abroad has increased and global growth prospects have deteriorated. The slowdown in the Swedish economy is thus expected to be more pronounced than was forecast in July. The Executive Board of the Riksbank has therefore decided to now hold the repo rate unchanged at 2 per cent and to postpone continued increases slightly."

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 3.3% in July, compared to 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%.  The Swedish Krona (SEK) last traded around 6.37 against the US dollar, placing it up about 4% against the dollar this year.


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