This from Sweden’s Riksbank:
INSTANT VIEW 1-Swedish cbank slashes rates record 175 bp
STOCKHOLM, Dec 4 (Reuters) – Sweden’s central bank slashed its key interest rate by a record 175 basis points to 2.00 percent on Thursday, a shock move to try to prevent the economy from sliding deeper into recession. The cut, more than three times larger than any reduction the central bank has ever made, was a far bolder move than markets had expected. Most economists were calling for 100 basis points.
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KEY POINTS:
- The Riksbank said it expected the repo rate to stay this level over the coming year
- The central bank said a large reduction was needed to dampen the drop in production and employment
- The central bank said it expects inflation to fall rapidly next year and be below target over the coming two years
Markets still pricing in anything as big as an 100bp cut from the BoE today at noon GMT, and anywhere from 50-75bps from the ECB at 12.45 GMT Thursday.
Worth remembering is the fact that Sweden’s Riksbank moved its policy decision ahead two weeks, perhaps to make record rate cut day all the more memorable – it being one among many? Hmmmm.
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