Interest rates remain unchanged

The Swedish Central Bank, Riksbanken, will leave interest rates at -0.5%, writes Svenska Dagbladet. An increase in interest rates will be postponed until the end of this year. A press release from the Riksbank stated that the underlying inflation has been unexpectedly low which raises questions about the strength of the inflation development. Anna Öster, Chief Economist at Länsförsäkringar, thinks the decision was expected, but points out that the SEK is still falling in value. “The Riksbank once again sends a message to be extra careful. This is difficult for the market to understand and the market asks itself what needs to happen in order for the Riksbank to increase inflation. The window in which to raise interest rates will not be open forever. “ The six governors of the Riksbank were first in disagreement. Deputy Governor Henry Ohlsson argued against the decision to keep the repo rate unchanged and against the interest rate path in the fiscal policy report. Ohlsson wanted to raise the repo rate to -0.25% with reference to the strong economic growth in Sweden, and internationally.   The FT reports that the Kronor is at 10.48 to the Euro, its lowest level since the 2009 Financial Crisis, and down 6.1% this year.

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