2021.09.2108:03:00UTC+00Riksbank Forecasts Interest Rate To Remain Zero Until 2024

Sweden's central bank forecast the interest rate to remain at zero percent until the third quarter of 2024.

At the monetary policy meeting, the Executive Board of Riksbank decided to hold the repo rate at zero percent and it is expected to remain at zero for the entire forecast period.

The board will also continue to purchase securities during the fourth quarter, in line with the earlier decisions.

The board also decided to close the lending facilities that were launched during the pandemic and to restore at the turn of the year the requirements for the collateral the banks have to provide when borrowing from the Riksbank.

In the near term, the Riksbank's inflation forecast has been revised up, primarily because electricity prices have risen unexpectedly sharply.

The inflation forecast for 2022 was lifted to 2.1 percent from 1.7 percent and that for 2023 was retained at 1.8 percent.

The economy is forecast to grow 3.6 percent next year instead of 3.7 percent estimated previously. Meanwhile, the outlook for 2023 was lifted to 2 percent from 1.9 percent.