savers are now waiting for yet another interest-bang. While interest rates on mortgages can be expected to continue exerting downward pressure on an already hot Swedish housing market.
– In all likelihood, it will be a little cheaper to borrow. Since it is naturally so that when the interest rate is negative you get poor or no return at all on savings accounts, says Ingves.
He does not believe the recent reduction should have to force the so-called penalty interest on banks’ wages and savings accounts.
– Fixed extremely’s a question for the banks.
The Riksbank’s decision on new support purchases and lowered interest rate is justified by the krona has strengthened against the euro, which in turn takes the edge off the Riksbank attempt to avoid deflation. The haunting is the market’s reaction to a massive stimulus package from the European Central Bank (ECB).
Ingves flag for further rate cuts if inflation expectations continue to rise against the Riksbank’s inflation target of 2 percent.
– The there are no technical barriers to making interest rate even more negative, if needed, he said.
Following in the Danish Central Bank’s track and make currency intervention to weaken the crown is not ruled out.
The support purchases of government bonds is now heading up to 7 percent of outstanding government bonds. Something roof want Ingves not enter.
– We can buy considerably more if we need it.
– I do not put a limit in the current situation on anything regarding this.
The krona case for interest rate announcement, to its lowest level against the dollar since February 2009, is welcome Ingves said:
– From an inflation perspective, it is not a disadvantage.
According to the textbook strengthens a weaker exchange rate competitiveness of Swedish industry.
– I do not Riksbank should give way to conduct foreign exchange interventions on the exchange rate is on a too strong level because it could lead to inflation expectations binds itself to a very low level, said Anders Borg, Sweden’s former finance minister.
Other observers are concerned that just krona now looks to be crucial for monetary policy.
– It is not good, says Robert Bergqvist , SEB’s Chief Economist.
According to Ingves however, the krona increased weight of the Riksbank a consequence of how the world looks like.
– Periodically it becomes turbulent exchange market. We have to live with and fend as best we can.
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