Thursday, February 12, 2015

If Sweden cuts interest, and has a QE, can Denmark be far away?

"Riksbank cuts repo rate to −0.10 per cent, buys government bonds for SEK 10 billion and is prepared to do more at short notice" It states on its website 

"There are signs that underlying inflation has bottomed out, but the situation abroad is now more uncertain and this increases the risk that inflation will not rise sufficiently fast. The Executive Board of the Riksbank has therefore decided to cut the repo rate by 0.10 percentage points, to -0.10 per cent, and to adjust the repo-rate path down somewhat. At the same time, the interest rates on the fine-tuning transactions in the Riksbank's operational framework for the implementation of monetary policy are being restored to the repo rate +/- 0.10 percentage point. Moreover, the Riksbank will buy government bonds for the sum of SEK 10 billion. These measures and the readiness to do more at short notice underline that the Riksbank' is safeguarding the role of the inflation target as a nominal anchor for price setting and wage formation.


fORECASTS FOR SWEDISH INFLATION, GDP, UNEMPLOYMENT AND THE REPO RATE*
20132014201520162017
CPI0.0-0.2 (-0.2)0.1 (0.3)1.9 (2.0)3.3 (3.2)
CPIF0.90.5 (0.5)0.9 (1.0)2.0 (2.0)2.2 (2.1)
GDP1.31.8 (1.8)2.7 (2.6)3.3 (3.3)2.2 (2.3)
Unemployment,
ages 15-74, per cent
8.07.9 (7.9) 7.6 (7.5)7.1 (6.9)6.7 (6.6)
Repo rate, per cent1.00.5 (0.5)-0.1 (0.0)0.0 (0.2)0.9 (1.1)
*Annual percentage change, annual average"

Without any risk or responsibility. 

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