World Economy

Sweden Rates on Hold

Sweden Rates on HoldSweden Rates on Hold

Sweden’s central bank kept its lending rates on hold on Wednesday after signs of an uptick in inflation and stronger economic growth, surprising markets which had expected a further cut into negative territory, Reuters reported. The Riksbank expanded bond buying and pushed monetary tightening further into the future, but left the key repo rate at -0.25%, welcome news for Swedish banks which had started to complain that ultra-loose monetary policy could put financial stability at risk. Sweden is battling a deflationary threat just as it enjoys one of Europe’s strongest growth rates, accompanied by concerns about a housing bubble and one of the region’s highest household debts. This poses a dilemma for central bankers.