Riksbank Still Sees Key Rate at Zero Throughout Forecast Horizon
By Dominic Chopping
STOCKHOLM--Sweden's central bank said Tuesday that it still
expects the key repo rate to remain at 0% in the years to come,
with updated forecasts showing the repo rate remaining unchanged
throughout its forecast horizon that runs to the third quarter of
The Riksbank said it will also continue to purchase securities
during 2021, in line with earlier decisions, and expects that its
holdings of securities will be more or less unchanged during
The Swedish economy has recovered quickly and inflation is
expected to become temporarily higher than the 2% target in the
coming year, before falling back again, it added.
The central bank also said it is on Tuesday closing lending
facilities that were launched during the pandemic and, at the turn
of the year, will restore requirements for collateral that banks
have to provide when borrowing from the Riksbank.
"The measures were implemented in the acute initial stage of the
crisis to guarantee access to liquidity in the financial system.
But the demand for these programs has been low for some time," it
It reiterated that it may cut the repo rate into negative
territory or use other measures to make monetary policy more
expansionary if inflation prospects weaken of if confidence in the
inflation target comes under threat.
Write to Dominic Chopping at firstname.lastname@example.org
(END) Dow Jones Newswires
September 21, 2021 04:18 ET (08:18 GMT)
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