Riksbank expands quantitative easing

The Riksbank has held its benchmark repo rate unchanged at a negative 0.35% and has said it will expand its bond buying programme by SKr 65 billion to a total of SKr 200 billion.

The central bank expects to keep the repo rate low until 2017 even though inflation is showing a clear upward trend. However, there is still considerable uncertainty regarding the strength of the global economy and central banks abroad are expected to pursue an expansionary monetary policy for a longer time.

Negative interest rates will continue to have an impact on house prices, and Riksbank Governor Stefan Ingves yesterday reiterated that the Swedish housing market is “out of balance”, and that politicians must ensure that an amortisation requirement is put in place.