Swedish Central Bank Cuts Benchmark Rate
Tip:The Swedish central bank cut its benchmark interest rate Thursday by a quarter of a percentage point to 0.25 percent, saying the economic downturn appeared to be deeper than previously forecast.
Q:what does the The Swedish central bank say?
A:The bank said the rate was “expected to remain at this low level over the coming year” and added there were “several signs that economic activity will improve.” Most economists had expected the bank to leave borrowing costs steady.
The central bank also announced it would offer 100 billion kronor, or $13.1 billion, in one-year loans to banks at 0.15 percentage point above the benchmark rate.
Q:What is the reaction of The European Central Bank?
A:The European Central Bank is expected to leave its main rates steady later Thursday after the recent release of a string of more positive economic data.
Q:What are the results of the cutting?
A:Having lowered its main refinancing rate to 1 percent, from 4.25 percent in October, as well as having cut its other main interest rates, the bank appears to have adopted a wait-and-see approach to additional stimulus.
Like other central banks, the E.C.B. has announced unconventional steps to try to lift bank lending and economic activity. In early June, Jean-Claude Trichet, the president, said that the bank would execute a $60 billion, or $85 billion, program of buying covered bonds — securities created from either mortgage loans or public sector loans from across the euro area.
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