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Riksbank Ready To Act; Rate Cut Unlikely, Says Governor Ingves

Sweden's central bank is prepared to act as negative effect from the spread of coronavirus on economic activity is unavoidable, Riksbank Governor Stefan Ingves said Tuesday.

"Our assessment right now is that maintaining the supply of liquidity is the most important thing," Ingves said. "This could be more generous terms for loans to banks and/or direct purchases of securities."

The Executive Board assessed that the Riksbank's balance sheet should not be reduced in the coming year. The governor said a rate cut is not the most important measure at present.

Deputy Governor Anna Breman noted that the Riksbank has scope to stimulate the economy if the downturn is severe.

"The Riksbank's toolbox can be used to the full," Breman said. However, the type of measures taken will depend on the situation.

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