Swedish central bank keeps wary eye on global economy, ECB, Fed By Reuters

Swedish central bank keeps wary eye on global economy, ECB, Fed By Reuters



STOCKHOLM (Reuters) – Members of the Swedish central bank’s rate-setting board said growing uncertainty about the global economy and potential monetary policy shifts abroad could influence future Riksbank moves, minutes of its latest meeting showed on Friday.

The six-member board was unanimous its decision to hold rates at -0.25% this month, but the minutes showed them voicing caution about the effect of any loosening of monetary policy in the far larger U.S. and eurozone economies.

“If the markets are right, the major central banks may turn their monetary policy around, into a more expansionary direction,” Riksbank Governor Stefan Ingves said in the meeting minutes.

“If this is the case, we will need to take a stance at our future monetary policy meetings on what it means for monetary policy in Sweden.”

The Riksbank on July 2 stuck by a forecast to tighten policy by early 2020 even as it highlighted risks posed by the global economic outlook. [nL8N2441D7]

Yet many economists believe it may have missed its window to embark on any significant near-term tightening with a Sino-American trade war denting global economic prospects and heavy hitters such as the U.S. Federal Reserve moving to ease policy.

“On the margin (the Riksbank minutes were) slightly on the dovish side where all board members highlight increasing risks and that policy can be reassessed if the outlook continues to weaken,” Swedish bank SEB said in a research note.

“The minutes do not change our view that the Riksbank will not hike rates this year.”

With Swedish inflation set to dip in coming months because of falling energy prices, several board members noted that were this to “significantly dampen” inflation expectations, the bank’s ability to keep prices near its 2% target would worsen, the Riksbank said.

“Several board members also pointed to the importance of underlying inflation continuing to rise,” the central bank said in a summary of several board members comments.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





Source link