The Riksbank decided Thursday to put down the repo rate by 0.10 bp to -0.10 percent. The interest rate path has been revised downwards too.
In addition to negative interest rates, will Riksbank buy government bonds for 10 billion Swedish kronor.
Swedish krona weakened immediately against a number of currencies after the market became acquainted with clean modest and that the Riksbank will buy government bonds. SEK fell 12 cents to 8.49 against the dollar and 9.62 against the euro.
The yield on two-year government bonds fell five points to 0.23 percent about ten minutes after clean modest –
Meanwhile the Stockholm Stock Exchange Large Cap Index, OMSS30, 1.7 percent Thursday, shortly after 11 o’clock, led by export shares.
Norwegian interest also fall
– Riksbank decision draws Swedish rates down. We also see a marked fall in Norwegian interest rates. Chances for interest rate cuts from Norges Bank in March has increased, says DNB Markets on Twitter.
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Deputy Governor Flodén reservation against QE
– All in all, this was a lot more action than we had expected. Both consensus and our estimate was that interest rates would remain unchanged. Buyback program was also a surprise. Deputy Governor Marin Flodén reserved toward bond purchases, but beyond this was the decision of the Riksbank unanimously, says economist Anders Brown Bramstedt in Handelsbanken Capital Markets’ Swedish research team.
The Riksbank writes in its press release that there are signs that inflation has now bottomed out, but that the uncertainty in our surroundings increases the risk that inflation will not move quickly enough.
– Swedish growth benefiting the low oil price, a weaker exchange rate and the low repo rate. We expect GDP growth will increase faster forward, and that the labor market will improve, says the Riksbank’s press release. (NB The case continues below)
– This is just the start
While Scandinavian brokerage is surprised today’s announcement from the Riksbank, believes the British research firm Capital Economics that the Riksbank will go further.
– repo rate is still higher than the main borrowing rates in the euro zone, Switzerland and Denmark . And bond purchases, which was reported today represents only 0.3 percent of Sweden’s annual GDP, says the chief economist for Europe, Jonathan liar, Dagens Industri.
Loyna points out that the European Central Bank to Compare buying bonds for more than ten percent of Eurozone GDP. He also emphasizes the difference to Switzerland and Denmark, which has cut to negative interest rates because of pressure on the upside.
Do you pay for housing feast banks invite?
– Reduces likelihood of interest rate cuts in March
Lowest residential rate ever
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