STOCKHOLM, Oct 28 (AFP) : The Swedish central bank set a zero base interest rate on Tuesday, deciding to cut its key rate by a quarter of a per centage point in a drive to push up exceptionally low inflation.
This is a record low and the central bank said it would stay at this rate until inflation picks up. Inflation was too low, the bank said in a statement, although the Swedish economy was doing relatively well and the overall climate was improving.
It expects inflation this year to turn out to be a negative 0.2 per cent, pointing to slight deflation, but that next year it will rise to plus 0.4 per cent. The rate cut was steeper than analysts had expected. They had forecast a cut of 0.20 points.
The bank said that this new low rate should increase demand in the economy and that this in turn would help to push up prices and inflation. In September, consumer prices fell by 0.4 per cent, far below the central bank's target for inflation of 2.0 per cent which has not been achieved since the beginning of 2012.
Sweden sets record low zero interest rate to boost inflation
FE Team | Published: October 29, 2014 00:00:00 | Updated: November 30, 2026 06:01:00
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