• Sweden's news in English
 
app_header_v3
Sweden slashes interest rate to new record low
Sweden has had negative interest rates since last year. Photo: Fredrik Sandberg/TT

Sweden slashes interest rate to new record low

The Local · 11 Feb 2016, 10:16

Published: 11 Feb 2016 09:37 GMT+01:00
Updated: 11 Feb 2016 10:16 GMT+01:00

On Thursday the Riksbank announced that it was lowering its key rate, the repo, by 0.15 percentage points from -0.35 percent to -0.50.

It said that the reason for the move was continuing low inflation.

"The economy continues to strengthen but inflation is expected to be lower during 2016 than previously forecast. The period of low inflation will therefore be longer," it said in a press statement.

It is almost a year ago to the day since Sweden's Riksbank lowered the interest rate to negative levels, the first time in the country's history.

Thursday's move was not entirely unexpected, with several experts predicting the cut ahead of the announcement. And the bank would not rule out lowering the repo even further in future if needed.

"The Executive Board (...) still has a high level of preparedness to make monetary policy even more expansionary, even between the ordinary monetary policy meetings," it said.

It also said that purchases of government bonds would continue for the first six months of the year, in accordance with a plan adopted in October.

Sweden's bond buying programme is a form of quantitive easing, which involves borrowing money to inject back into the economy. 

Story continues below…

The idea behind the negative rate is to try to boost inflation in order to raise the price of everyday goods and services in Sweden which have been stagnant for the past couple of years. It is argued that this in turn will improve economic prospects and help the country meet its inflation target of two percent by 2017.

The Swedish krona dropped sharply by around 0.10 kronor against both the dollar and the euro immediately after the announcement, making one dollar worth 8.47 kronor and a euro 9.61 kronor.

For Swedes and foreigners living in Sweden drawing a salary in kronor, a weak krona means that your money won't go as far if you visit the US or other European countries, but if you invite friends from those places to visit Sweden it won't seem so expensive for them and their holiday money will go further.

For more news from Sweden, join us on Facebook and Twitter.

The Local (news@thelocal.se)

Today's headlines
In pictures: Eight cool compact Scandinavian houses
Houzz.se editor Sara Norrman rounds up some neat but great Scandinavian houses. Photo: Sommarnöjen

Size isn't everything, and Houzz.se's editor in chief Sara Norrman proves it with this looks at nine brilliant uses of compact Scandinavian houses.

Brexit and the growing digital divide
A business meeting at Artipelag in Stockholm. Photo: Henrik Trygg/mediabank.visitstockholm.com

Modern tech hubs like Stockholm are thriving while smaller regions struggle. We need to close this gap and we need to do it quickly, argues Leif Rehnström, CEO of the Skellefteå-based Hello Future!

Brexit vote
'Brexit is an opportunity for businesses in Stockholm'
Could London's pain be Stockholm's gain post Brexit? Photo: Kirsty Wigglesworth/AP/TT

The Local speaks to British business owners in Sweden about how they think the Brexit vote will impact their work.

Swedish police to hand out anti-groping armbands
A boy and a girl wearing the armbands. Photo: Swedish police

Swedish police have launched a campaign aimed at curbing sexual harassment among young people.

Use it or lose it: Swedish banknotes expire this week
The notes in question. Photo: Micke Larsson/TT

Make sure you don't forget to spend your old Swedish 20, 50 and 1,000 kronor notes, which will no longer be legal tender by the end of the week.

Foul-mouthed attack on young Swedish mother in England
York from above. Photo: Peter Czerwinski

The woman was told to go back to her own country after she was heard speaking Swedish to her children.

Meat-free days soaring in Swedish schools
Meat-free days are up by as much as 80 percent in Swedish schools. Photo: Lunds Universitet/TT

The number of Swedish schools ditching meat has grown significantly according to a study of municipal environmental credentials by a sustainability magazine.

Why these recalled Ikea drawers ‘can result in death’
Ikea demonstrates the potential danger at a news conference in Washington. Photo: Carolyn Kaster/AP/TT

Swedish furniture giant Ikea said on Tuesday that 35 million chests and dresser units recalled in North America can 'result in death or injuries to children' if not properly anchored.

The Local List
Five things to do in Stockholm when it empties for summer
Photo: Henrik Trygg/visitstockholm.com

The Swedish capital can feel a bit empty during the summer, but fear not, there are ways to enjoy it.

Brexit: Swedes in the UK
'My Swedish friends and I talk about moving to Scotland'
Moving further north is one post-Brexit option touted by a UK-based Swede The Local spoke to. Photo: Photo: Kirsty Wigglesworth/AP/TT Hasse Holmberg/TT

The Local speaks to UK-based Swedes on the impact they think Brexit will have on their lives and their future plans in the country.

Sponsored Article
Why Swiss hospitality graduates are in demand
National
Is this Swede the new Vincent van Gogh?
Sponsored Article
5 reasons you should try dating with The Inner Circle
Politics
Citizenship applications up 500% for Brits in Sweden
National
The humble Swede who sent England home from Euro 2016
Blog updates

28 June

A message for British expats in Sweden (The Diplomatic Dispatch) »

"The people of the United Kingdom have voted to leave the European Union. As Prime Minister…" READ »

 

10 June

i lördags, på lördag – time phrases for present, past and future (The Swedish Teacher) »

"Hejsan! Swedish time phrases can be difficult to master. It takes a lot of practice to…" READ »

 
 
 
Sponsored Article
How to find student housing in Malmö: 5 tips
Gallery
Property of the week: Torhamn
Sponsored Article
International students in Stockholm partner with Nepal school
International
'A morning of sorrow': Sweden reacts to Brexit vote
International
Sweden opposition cools talk of 'Swexit' poll
International
'Devastated' - Brits in Sweden shocked by Brexit vote
Sponsored Article
Why you should attend an international job fair
Gallery
People-watching: June 22nd
Sponsored Article
Avoid hidden fees when sending money overseas
Private
The Local Voices
'Swedes don't treat me differently because I wear a hijab'
Culture
How do Swedes celebrate Midsummer?
Sponsored Article
Education abroad: How to find an international school
Culture
Coming soon: Sweden’s smelly fermented fish
Sponsored Article
The man behind Sweden's biggest music festival
National
Assange lawyer: Sweden should recognize UN opinion
Private
The Local Voices
Why is this Syrian dentist who hugs like a Swede worried about undies?
Sponsored Article
US expats: Have you met your tax deadlines?
Swedish nationalist 'shot and ate' lion and giraffe
Sponsored Article
Malmö: Home to the best food in Sweden?
Analysis & Opinion
'Sweden's residency revamp is harmful and inhumane'
Sponsored Article
VIDEO: Why Malmö is the world's 6th best city for biking
Photo: The Local
The Local Voices
UNHCR boss: 'It's hard to start your life without your family'
Sponsored Article
5 reasons you should try dating with The Inner Circle
Politics
VIDEO: Brits in Europe say why UK should stay
Photo: Marko Risović
The Local Voices
World Refugee Day: Searching for safety in Europe - in pictures
Sponsored Article
6 simple travel hacks that will make your life easier
National
Is Swedish nationalists’ foreign food ban bananas?
Gallery
Property of the week: Söråker
International
Poll shows huge support for EU in Sweden
The Local Voices
How a Syrian scuba diver mobilized Sweden's biggest asylum centre
Sport
Zlatan: 'If we'd been fighting for real, he'd be in hospital'
3,308
jobs available
PSD Media
PSD Media is marketing company that offers innovative solutions for online retailers. We provide modern solutions that help increase traffic and raise conversion. Visit our site at:
psdmedia.se