Riskbank stays put even as real interest rates set to drop
Rate-setters at the Riksbank stayed put at their latest policy meeting, referencing "still considrable uncertainties" abroad.
The central bank´s main policy lever, the repurchase rate, was kept at -0.50%, as expected by the consensus, with the pace of government bond purchases set to continue during the backhalf of 2016 as was decided in April.
Policymakers at the Riksbank also said monetary policy needed to remain expansive in order to keep inflation on a rising trend.
"Not until the second half of 2017 does the Executive Board consider it to be appropriate to begin slowly increasing the repo rate", the central bank said in a statement.
"With the Riksbank on hold, rising inflation means that real interest rates in Sweden are set to drop to a 40-year low. Such an accommodative stance seems unnecessary given the sound economic outlook and we suspect that the Bank will raise interest rates next year," said Stephen Brown, European economist at Capital Economics.
"[...] We think that the Riksbank’s next move will be to tighten monetary policy. Indeed, the Riksbank’s judgment that it will raise rates in the second half of 2017 seems more sensible than the consensus expectation that rates will remain unchanged until 2018."
As of 1145 BST the US dollar was 0.09% lower at 8.46 krona.