Sweden Riksbank keeps key repo rate unchanged at -0.35%

FXStreet (Mumbai) - At its monetary policy decision today, the Swedish Central bank, Riksbank, kept the benchmark repo rate unadjusted at -0.35%.

Meanwhile, EUR/SEK dropped sharply to 9.2674 in a knee-jerk reaction the decision, before recovering to 9.2860 levels, down -0.40% so far.

Key headlines from the policy statement:

Developments in Swedish economy have been somewhat stronger than expected, while uncertainty remains globally

Repo rate averaging -0.41 pct in Q4, 2016 vs. pvs forecast -0.41 pct

Repo rate averaging 0.12 pct in Q4, 2017 vs. pvs forecast 0.12 pct

Repo rate averaging 0.66 pct in Q4, 2018 vs. pvs forecast 0.66 pct

Executive board remains highly prepared to make monetary policy even more expansionary, even between ordinary monetary policy meeting

Purchases of government bonds will continue for first six months of 2016 as was decided in October

There has been an upward trend in inflation since last year, but it is not yet on a firm footing

Safeguard resilience of upturn in inflation, monetary policy needs to remain very expansionary

Contribution to inflation made by depreciation of Krona is expected to decrease next year

Deems that repo rate will not be raised until cpif inflation has stabilised around 2 per cent during first half of 2017