Swedish central bank sticks to pro-growth monetary stance
STOCKHOLM : Sweden’s central bank on Tuesday kept key rates in negative territory and said it stood ready to lower them further while the economic growth outlook remained shaky.
The Riksbank kept its key rate unchanged at -0.35 percent, citing a somewhat stronger than expected Swedish economic performance despite some global uncertainty.
“There has been an upward trend in inflation since last year, but it is not yet on a firm footing. To safeguard the resilience of the upturn in inflation, monetary policy needs to remain very expansionary,” the Riksbank said in its statement.
The Executive Board of the Riksbank said that it is “highly prepared” to make monetary policy even more expansionary.
According to the bank, its historically low rate has contributed to growth, falling unemployment and an upward inflation trend.
The sharp and historic increase in the number of asylum seekers coming to Sweden is expected to lead to an increase in public expenditure, which will likely contribute to higher GDP growth and lower unemployment in the coming years.