The Swedish krona dipped today as the central bank left interest rates unchanged, but some policy makers were arguing that lower rates are necessary to facilitate economic growth.
The Riksbank decided to leave its main interest rates unchanged at today’s meeting. The central bank noted in the statement that both global and domestic economies improved, saying:
There are now increasing signs confirming that economic activity is beginning to improve.
Yet some policy makers thought that a reduction of the repo rate to 0.75 percent is warranted by the current economic conditions. The statement explained risk and advantages associated with such move:
An even lower repo rate could lead to inflation attaining the target slightly sooner. However, at the same time, a lower repo rate now, when the situation for households is already relatively favourable, could lead to a further increase in the risks related to high household debt.
USD/SEK climbed from 6.5921 to 6.5921 as of 17:45 GMT today. EUR/SEK advanced from 8.7039 to 8.7669.
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