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Swedish central bank, Riksbank cuts interest rate

Thursday, 16 February 2012
The Swedish central bank, the Riksbank has decided to cut its repo rate by 0.25 percentage point to 1.50 percent (1.75).

According to analyst consensuses of 13 analysts, 10 of them where for a rate cut of 0.25 percentage point to 1.50 percent, while the other three were assuming that interest rates would remain unchanged.

In order to stabilize inflation to around 2 per cent target and resource utilization in the economy at a normal level, the Executive Board decided to lower the repo rate by 25 basis points.
"The repo rate is expected to remain at that level well into the 2013. In the future, when inflationary pressures are rising, the repo rate will needs to be gradually increase, " writes the Riksbank.

The question now is to see how this will stimulate activities and reduce borrowing cost for the like of home owners. Sweden already has problems with it domestic indebtedness considered to be one of the highest in Europe and it is believed that this is one of the factors considered in lowering the rates to that level.
By Scancomark.se Team

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