FXStreet (Edinburgh) – In line with market expectations, the Nordic central bank has left unchanged its monetary policy stance at today’s meeting, with the benchmark rate at -0.35% and the monthly pace of bond purchases intact until end of the year.
The central bank has acknowledged the improvements in the US, UK and the euro area, although it remains worried about lower energy prices and developments in China and emerging markets.
The Riksbank noted the benefits of the expansionary monetary policy, as it sees
inflation figures, the labour market and economic activity all picking up pace. However, it has argued that persistent weakness in energy prices could threaten the upside projections of domestic consumer prices and affect longer term inflation expectations.
While the central bank remains ready to act if the situation requires it, it will also remain vigilant on the levels of household indebtedness, which have been worrying officials since the implementation of a looser monetary policy.
The Riksbank now sees the CPI flat for the current year, at 1.8% in 2016 and 2.8% in 2017. In addition, the bank expects the GDP to expand 3.1% in 2015 and 3.4% in 2016. It also forecasts the repo rate to come back to the positive territory in 2017.
(Market News Provided by FXstreet)