Riksbank Pencils in First Rate Hike Toward End of 2024
By Dominic Chopping
STOCKHOLM--Sweden's central bank on Thursday kept its key repo
rate at 0%, as expected, and indicated that a first rate hike will
likely come toward the end of 2024.
The Riksbank had previously said it expected the repo rate to
remain unchanged at zero throughout its forecast horizon that ran
to the third quarter of 2024, but updated forecasts presented
Thursday show a rate hike in the fourth quarter of 2024.
The bank also said it will begin reducing its balance sheet
ahead of the forecast rate hike.
"The Executive Board's forecast is that the asset holdings will
remain approximately unchanged in 2022 and then decrease
gradually," it said.
"With this monetary policy, inflation is expected to be on
target in the longer run."
The asset purchase programme initiated in March 2020 will expire
on 31 December 2021 and the Riksbank said it will purchase bonds
for 37 billion Swedish kronor ($4.05 billion) during the first
quarter of 2022.
Inflation in Sweden is expected to fall next year as the rise in
energy prices is expected to moderate while supply-chain
bottlenecks will be resolved as growth enters a calmer phase, the
If inflation is to be close to the target in the longer term,
cost pressures need to increase more permanently, which requires
continued support from monetary policy, it added.
Write to Dominic Chopping at firstname.lastname@example.org
(END) Dow Jones Newswires
November 25, 2021 04:23 ET (09:23 GMT)
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