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Sweden cuts negative interest rate further to boost economy

Xinhua, March 18, 2015 Adjust font size:

Sweden's central bank, the Riksbank, cut its main interest rate even further to negative 0.25 percent on Wednesday and announced massive bond purchase measures to boost the economy.

"There are signs that inflation has bottomed out and is beginning to rise, but the recent appreciation of the krona risks breaking this trend," the Riksbank said in a press release on Wednesday.

The Riksbank thus further lowered its repo rate, the rate at which the central bank lends to commercial banks, from minus 0.1 percent to minus 0.25 percent and announced that it would buy 30 billion krona (3.42 billion U.S. dollars) of government bonds, to "support the upturn in inflation."

The bank said it was "prepared to do more at short notice," which underlined that "the Riksbank is safeguarding the role of the inflation target as a nominal anchor for price setting and wage formation."

Among measures the Riksbank says it is ready to implement, are launching a program of loans to companies via the banks, the possibility of interventions on the foreign exchange, or buying other types of assets. Endit