The Swedish central bank on Wednesday decided to retain the benchmark repo rate at 1.5 percent. The decision was in line with expectations.
Riksbank said the Executive Board decided to hold the repo rate unchanged at the current low level to support economic activity and ensure that inflation is in line with the 2 percent target.
Repo rate is expected to remain at this low level for just over a year, it said.
Later when inflationary pressures increase, the repo rate will need to be gradually raised. However, the rate may need to be lower if the situation in the euro area is problematic and could worsen, and trigger further negative effects on the Swedish economy.
The bank noted that the unease in Europe is now casting a shadow over the Swedish economy.
by RTT Staff Writer
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