Sweden cuts key interest rate further below zero

STOCKHOLM -- Sweden's central bank, worried about a long period of low inflation, decided Thursday to cut its key interest further below zero to a record minus 0.50 per cent -- and didn't rule out further action.

See Full Article

Describing it as a "uniquely low interest rate," Riksbank Governor Stefan Ingves didn't want to speculate on future measures but said that "unfortunately the world looks different to what it did in December," when the bank last discussed the economic situation.

He pointed to a further drop in oil prices, turmoil in global markets and Japan's decision last week to cut one of its key rates into negative territory, which has pushed down the yields payable on its bonds.

"The period of low inflation will be longer than we expected, increasing the risk of weakening confidence in the inflation target ... and (of) inflation not rising toward the expected target," of some 2 per cent in 2017, Ingves said.

Analysts at Capital Economic say the 0.15 percentage point cut was slightly larger than investors had expected but was in line with its own expectations.

"Today's decision by Sweden's Riksbank ... demonstrated that it is prepared to set aside its worries about a housing market bubble and strong domestic demand in order to respond to very low inflation and policy easing by other central banks," said Jessica Hinds, European economist at Capital Economics. She indicated the Swedish central bank is likely to take further action.

"There is little sign that inflation will pick up any time soon, while surveys of business and consumer inflation expectations are not reassuring," she said, adding that other central banks were likely to loosen monetary policy further in the coming months.

Riksbank said its stimulus program involving purchases of government bonds will continue for the first six months of the year and that it will reinvest proceeds from the bonds until further notice.

The interest rate cut takes effect on Feb. 17.



Advertisements

Latest Economic News

  • Beer at the barbershop? Relaxed B.C. liquor laws come into effect Monday

    Economic CTV News
    British Columbia small business owners and their clients say they’re excited about relaxed liquor regulations coming into effect on Monday. One of the biggest changes will allow any business to apply for a liquor licence. Source
  • Note 7 battery design and manufacturing caused fires: Samsung

    Economic CTV News
    SEOUL, Korea, Republic Of - Samsung Electronics Co. says problems with the design and manufacturing of batteries in its Galaxy Note 7 smartphones caused them to overheat and burst into fire. The announcement Monday of the company's investigation into one of its worst product fiascos comes three months after the flagship phone was discontinued. Source
  • Hackers claim to take down oil company website over soccer

    Economic CTV News
    LIBREVILLE, Gabon -- Hackers said they took out the website of French oil company Total on Sunday over its sponsorship of the ongoing African Cup of Nations soccer tournament in the central African country of Gabon. Source
  • Trump's victory creates uncertainty for wind and solar power

    Economic CTV News
    HONOLULU -- President Donald Trump has disputed climate change, pledged a revival of coal and disparaged wind power, and his nominee to head the Energy Department was once highly skeptical of the agency's value. What this means for states' efforts to promote renewable energy is an open question. Source
  • OPEC, allies says production cuts ahead of schedule

    Economic CTV News
    VIENNA -- OPEC and key non-OPEC oil producers are near their target of taking 1.8 million barrels of crude a day off global markets less than two months after agreeing to do so in efforts to push up the price of crude, Russia's energy minister said Sunday. Source
  • Non-browning apple coming to U.S. next month but Canada will have to wait

    Economic CBC News
    The genetically modified non-browning apples a B.C. man has been developing for more than two decades will finally show up on some U.S. produce shelves next month. But Canada will have to wait to take its bite. Source
  • Tax scams and testing 'the Trump effect': CBC Marketplace's consumer cheat sheet

    Economic CBC News
    Miss something this week? We got you. Here's this week's Marketplace cheat sheet. Get this in your inbox every Friday. Sign up for the Marketplace newsletter. Poor puppy Liza Shepherd holds up picture of Abby, the Bernese Mountain Dog cross that cost her $6,000 in vet bills. Source
  • How to fight back against rising bank fees on chequing accounts

    Economic CBC News
    Canada's big banks continue to enjoy big profits. But that hasn't stopped them from charging customers a host of personal banking fees. In fact, fees have become an ever more important part of their revenues. Source
  • Bogus bongs or bogus lawsuits? Pipe maker sues over fakes

    Economic CTV News
    FORT LAUDERDALE, Fla. -- Don't want to bum your buzz, but that expensive bong you got cheap to smoke your pot may be bogus. High-end German glass water pipe maker Roor and its American licensee are filing lawsuits against smoke shops and mom-and-pop convenience stores in Florida, California and New York. Source
  • 'There isn't a best card out there': How to choose a credit card that works for you

    Economic CBC News
    Credit cards are sometimes lambasted as high-cost consumer debt that can quickly get borrowers into trouble. But if you pay off the balance each month, credit cards can also have significant perks. Loyalty programs like Air Miles, which has both a standalone program and partnerships with credit cards, have drawn a lot of criticism lately, but Canadians are still attached to credit cards that offer rewards. Source