Editions:  Austria · Denmark · France · Germany · Italy · Norway · Spain · Sweden · Switzerland

Ingves: Interest rates stable all year

Share this article

Ingves: Interest rates stable all year
10:32 CET+01:00
The head of Sweden's central bank has said he expects Sweden's interest rates to remain at their current low level in 2012, but warned banks that they must be more open about how much they earn from lending to customers.

Governor Stefan Ingves defended the Riksbank's policies, despite concerns that banks are not passing on lower interest rates to borrowers:

“Our interest rate decisions have an impact, even if they do not have an immediate effect. The monetary policy of Riksbanken is still effective in terms of capital management," Ingves told the Dagens Nyheter daily.

But, he said, banks should have "clearer policies as to how they declare their margins.".

Concerns were raised after last December's interest rate cut, as banks were slow to follow suit and cut mortgage rates.

On the broader economic outlook, Ingves said Swedish banks' reliance on international loans made it harder to maintain stability. However, he said Swedes had reason to be optimistic about the year ahead, despite great financial turmoil in the world.

“Sweden has a steady position with low debts and a balanced government budget. Expectations both for inflation and long-term inflation remain under control. Meanwhile, financial growth and productivity have developed well,” he told DN.

While Sweden's export figures represent half of its gross domestic product it also has strong capital flows, which strengthens the positive outlook, according to Ingves.

The purchasing index in Sweden, which reflects industrial economic activity, was on the up in December coming in at 48.9 percent, compared to 47.6 percent the previous month.

Get notified about breaking news on The Local

Share this article

Become a Member or sign-in to leave a comment.

From our sponsors

Change the world with a master's degree from Sweden's Linköping University

Master's students at world-leading Linköping University (LiU) aren't there simply to study. They solve real-world problems alongside experts in fields that can create a better tomorrow. Do you have what it takes to join them?