Riksbank: Interest rates unchanged in Sweden (upd)

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LAST UPDATE 11:34

The Swedish central bank has announced an unchanged policy, arguing that inflation above the target will decline next year, aiming for a first rate hike (after the pandemic) at the end of 2024.

The key repurchase rate has been at zero since early 2020, and the Riksbank is in no hurry to tighten its policy, despite a rapid recovery from the effects of the pandemic.

“If inflation is to approach the target in the long run, cost pressures must increase more permanently. This requires continued monetary policy support,” the central bank said in a statement.

Risksbank also insists on its plans to maintain its balance sheet until next year, before allowing its gradual reduction.

Central bankers around the world have difficulty answering the question of whether current high inflation is a temporary effect of the resumption of economies after the pandemic or will last longer, and when they should begin to limit overly loose monetary policy.

In Sweden, inflation in October was at its highest level since autumn 2008, but the Riksbank – which has already begun tapering into the asset market – is convinced that price pressures are temporary.

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Source From: Capital

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