Swedish Riksbank Cuts Repo Rate 25bps to 1.50%

Sweden's Riksbank cut its benchmark repo rate by another 25 basis points to 1.50% from 1.75%.  The Bank said: "Inflationary pressures in the Swedish economy are low. The economic outlook in Sweden has weakened as a result of developments abroad. In order to stabilise inflation around 2 per cent and resource utilisation in the economy around a normal level, the Executive Board of the Riksbank has decided to cut the repo rate by 0.25 percentage points to 1.50 per cent. The repo rate is expected to remain at this level until some time in 2013."

The Riksbank previously also cut the rate by 25 basis points at its December meeting last yer, while the bank last increased the benchmark repo rate by 25 basis points to 2.00% at its July meeting, after also increasing by 25 basis points at its April meeting in 2011.  Sweden reported annual inflation of 2.3% in December, 2.8% in November, down from 3.2% in September, 3.4% in August, 3.3% in July, 3.1% in June, and 3.3% in May, the same as April, and up slightly from 2.9% in March; while also above the Riksbank's inflation target of 2.0%. 

Sweden's economy expanded 1.6% q/q in Q3 (0.9% in Q2, 0.8% in Q1), placing annual GDP growth at 4.6% (4.9% in Q2, 6.4% in Q1).  The Swedish Krona (SEK) has weakened about 5% against the US dollar so far this year, while the USDSEK exchange rate last traded around 6.77.

www.CentralBankNews.info