Business

Sweden cuts rates below zero and starts QE

Riksbank chief Stefan Ingves Image copyright Getty Images
Image caption Riksbank chief Stefan Ingves: "We are ready to do more"

Sweden's central bank has cut its key interest rate from 0% to a record low of -0.1%.

It also launched a programme of quantitative easing, buying government bonds worth 10 billion kronor ($1.2bn) to inject cash into the economy.

The central bank, or Riksbank, said that there was a risk that inflation would not rise fast enough.

Prices have risen in only one of the last 12 months. The annual inflation rate in January stood at -0.3%.

The Swedish krona fell to its lowest level since 2010 after the announcement.

Riksbank chief Stefan Ingves said the bank was prepared to cut rates further: "Should this not be enough, we want to be very clear that we are ready to do more.

"If more is needed, we are ready to make monetary policy even more expansionary."

The bank said it expected the global economic recovery to continue, but at a "slow rate".

However, Sweden's economy is expected to have grown more than 2% last year.

The Riksbank said it would benefit from low oil prices, a weaker krona and low interest rates.

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