STOCKHOLM (dpa-AFX) - Corrected interest rate in the second para
Sweden's central bank unexpectedly cuts its key repo rate and expanded its asset purchase programme on Thursday.
The Executive Board of the Riksbank lowered its key rate to -0.35 percent from -0.25 percent. The bank also extended its government bond purchase programme by a further SEK 45 billion with effect from September and until the end of the year.
The repo rate was previously slashed in March, by 15 basis points. The bank had taken the rate into negative zone with a ten basis points cut in February, when it launched its bond purchase programme.
Policymakers said monetary policy needs to give more support to ensure that inflation continues to rise towards the target of 2 percent.
The repo rate is expected to be around -0.35 percent for just over a year. The repo rate path reflects the fact that it is possible to cut the repo rate further.
Further, the bank said it still has a high level of preparedness to make monetary policy even more expansionary if necessary, even between the ordinary monetary policy meetings.
Copyright RTT News/dpa-AFX