STOCKHOLM – Sweden’s central bank has cut its key interest rate to a record low of minus 0.25 per cent, saying the move was “to make monetary policy even more expansionary.”
The Riksbank on Wednesday lowered the repo rate by 0.15 percentage points, saying there are signs inflation “is beginning to rise, but the recent appreciation of the krona risks breaking this trend.” A higher currency can weigh on inflation by making imports cheaper.
The bank said the measures and “the readiness to do more at short notice” underlined that the Riksbank was determined to keep inflation anchored.
The Riksbank also said it had bought government bonds worth for 30 billion kronor ($3.5 billion) to support the upturn in inflation.
The rate change takes effect 25 mars.