Riksbank keeps rates unchanged, doubles up on QE, more to come
Sweden’s central bank unexpectedly kept its main policy rate on hold at -0.25%.
Economist had been expecting a 10 basis point cut, sending euro/swiss krona immediately lower by 0.76% in an immediate reaction.
However, the country's monetary authority more than doubled the size of its government bond purchase programme, from SEK40bn to SEK80-90bn. The central bank also lowered its forecast path for the repo rate. They now show rates unchanged until late 2016.
Riskbank also stressed that it stands ready to make additional cuts to the policy rate, buy more government bonds as well as lend to companies via banks, intervene on the FX market and purchase assets other than government bonds, Jessica Hinds, European economist at Capital Economics pointed out.
Furthermore, it reserved itself the right to act between meetings.
"We therefore think that the repo rate will be lowered further and the Riksbank may need to broaden its unconventional monetary policy too," Hinds added.