Swedish central bank keeps negative interest rate unchanged

Sweden's central bank left its key interest rate unchanged on Thursday but refused to rule out reductions in the future.

The bank left its repo rate at -0.35 percent after sending it into negative territory for the first time ever in February in order to push inflation closer to its 2-percent target.

"The Riksbank remains highly prepared to make monetary policy even more expansionary in the event of inflation prospects deteriorating," the Riksbank said in a statement.

Inflation figures have been rising in Sweden over the past year but won't reach 2 percent until next year, the bank said.

It cited recent turmoil on global stock markets and the slide in oil prices over the summer as examples of high uncertainty abroad.

Riksbank chief Stefan Ingves reassured markets that the bank could lower its interest rate further if inflation does not pick up sufficiently.

The bank also warned politicians that Sweden's heated housing market could create unsustainable levels of household debt.

"Current debt levels already pose a substantial risk to the Swedish economy. It is thus essential that the Swedish parliament, the Government and other authorities implement measures to reduce this risk," the bank said. Endit