JPY Daily News

Riksbank to Hold Interest Rates Steady

The release of the Riksbank meeting minutes from the last monetary policy meeting showed the Executive Board of the Swedish central bank decided to hold interest rates at the current 2% level until at least next year.

Swedish interest rates currently stand at 2% and the Riksbank said in light of the fiscal difficulties in the US and Europe the bank will pause in its rate hiking cycle until 2012. Citing a lower level of consumer confidence the Swedish economy will likely grow at a more moderate pace, reducing the need for additional rate hikes. One member of the Executive Board was in favor of a 25 bp rate cut.

CPI was in-line with forecasts at 3.2%. The Riksbank expects inflation will decrease to 2.6% in 2014 with the repo rate to be increased to 3.5% towards the end of 2014.

The Swedish krona initially reacted positively to the release of the monetary minutes but the USD/SEK failed at Tuesday's low of 6.5215 and turned higher as the USD gained on Italian debt concerns. Resistance for the USD/SEK is found at the November high of 6.6665 followed by the October 18th high of 6.7177.

Current Time: 05/26 23:03 GMT

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