2011-10-27

Riksbanken leaves the rate at two percent

Riksbanken decided today to leave the repo rate at two percent (as I guessed in an earlier post). The prediction for the future repo rate (räntebanan) was lowered. It was interesting to see that both Svensson and Ekholm (the two academics) made a reservation and had preferred to lower the rate to 1,75 percent.

My preference would have been to lower the rate like Svensson and Ekholm suggested, since the nominal GDP gap is still too large.

Read more at DN or SVD (both in Swedish only).