Sweden's central bank 'still planning to raise interest rates in April'
The governor of Sweden's Riksbank central bank has told MPs he still intends to raise rates by at least 0.25 percentage points in April, despite the failure of several banks in the US.
"We intend to increase [the core interest rate] by 25 points," Erik Thedéen said when questioned by the Swedish parliament's finance committee about the impact of the US bank failures on monetary policy in Sweden.
But he said that his team at the bank would continue to monitor the situation.
"We do not see any risks here and now, but we have a group at the Riksbank which is working 24/7 and following the developments and I expect that the Swedish Government Offices and the Swedish Financial Supervisory Authority are doing the same."
Interviewed by the TT newswire after his appearance in the parliament, Thedéen said that the failure of Silicon Valley Bank and Signature Bank in he US would without doubt affect Sweden.
"It's absolutely clear that what is happening in the financial markets now will have an impact on the data. It will, for example, be significantly more expensive for companies to finance themselves and it could be so that that will affect people's willingness to consume and invest," he said.
"The big spillovers for the Swedish economy are through lending costs, share price developments and the demand situation," he said.
However, Thedéen said that it remains his judgement that the risks to Sweden's economy from overly high inflation exceeded those that would result from further increasing interest rates.
"Inflation is worse than rent hikes," he said. "We have a broad based inflation which we still haven't been able to reverse in any clear way."
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"We intend to increase [the core interest rate] by 25 points," Erik Thedéen said when questioned by the Swedish parliament's finance committee about the impact of the US bank failures on monetary policy in Sweden.
But he said that his team at the bank would continue to monitor the situation.
"We do not see any risks here and now, but we have a group at the Riksbank which is working 24/7 and following the developments and I expect that the Swedish Government Offices and the Swedish Financial Supervisory Authority are doing the same."
Interviewed by the TT newswire after his appearance in the parliament, Thedéen said that the failure of Silicon Valley Bank and Signature Bank in he US would without doubt affect Sweden.
"It's absolutely clear that what is happening in the financial markets now will have an impact on the data. It will, for example, be significantly more expensive for companies to finance themselves and it could be so that that will affect people's willingness to consume and invest," he said.
"The big spillovers for the Swedish economy are through lending costs, share price developments and the demand situation," he said.
However, Thedéen said that it remains his judgement that the risks to Sweden's economy from overly high inflation exceeded those that would result from further increasing interest rates.
"Inflation is worse than rent hikes," he said. "We have a broad based inflation which we still haven't been able to reverse in any clear way."
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