https://sputnikglobe.com/20220920/sweden-braces-for-monster-interest-rate-hike-to-tame-raging-inflation--1100989803.html
Sweden Braces for 'Monster' Interest Rate Hike to Tame Raging Inflation
Sweden Braces for 'Monster' Interest Rate Hike to Tame Raging Inflation
Sputnik International
Sweden's decades-high inflation rate has been exacerbated by a weakening krona, which has recently lost ground against the euro and is the second-worst... 20.09.2022, Sputnik International
2022-09-20T05:11+0000
2022-09-20T05:11+0000
2022-09-20T05:11+0000
economy
sweden
scandinavia
newsfeed
inflation
currency
interest rates
https://cdn1.img.sputnikglobe.com/img/105030/33/1050303378_0:0:5482:3084_1920x0_80_0_0_9189f5dbd873210f8ed75d54458e6c9e.jpg
The Riksbank, Sweden's Central Bank, is poised for its largest interest hike in nearly three decades, with a decision to be announced later this week.While the Stockholm-based bank is tipped to introduce a 0.75 percent increase, dubbed a “monster hike” by the Swedish press, an even bigger move cannot be excluded. Dagens Industri, Sweden's leading economic daily, recommended a full 1 percent hike. Either variant would constitute the largest increase since the current policy regime, with a 2 percent inflation target, was introduced in 1993.A 1-percent hike would place Sweden among the top ten economies with the world's most-traded currencies to make such a move this year, second only to Canada.A major increase of the interest rate would also come at a time when Sweden is struggling with record inflation, which has reached historic proportions. At 9 percent, it is at its highest point in several decades, and has been well above the Central Bank’s forecasts for nearly a year in a row.Riksbanken Governor Stefan Ingves conceded earlier this month that incremental rate hikes may no longer suffice and said that previous plans for a 0.5 percent increase are no longer valid.The Scandinavian bank Nordea envisaged a 0.75 percent increase in the interest to be announced followed by another 0.5 percent hike to a total of 2 percent at the end of the year.Sweden's inflation woes are exacerbated by a weakening krona, which in recent months has lost more ground against both the euro and the dollar and is the second-worst performer among major currencies this year.Some specialists, including Swedbank Chief Economist Mattias Persson, have warned against too large a hike, stressing that it could further hurt households, which are already postponing major spending amid a cost-of-living crisis and elevated energy costs, as well as businesses, which are slashing expenditures.Earlier, outgoing Social Democrat Finance Minister Mikael Damberg warned that ballooning public debt would “add fuel to inflation and further raise interest rates and could also threaten public finances and threaten welfare and pensions.”Last week, the New York Stock Exchange suffered one of its worst losses in recent memory after investors reacted to a inflation report by selling off stocks. This prompted forecasts that the US Federal Reserve is to make its biggest increase in interest rates by a full percent, a move likely to be copied by other nations.
https://sputnikglobe.com/20220915/nato-membership-may-harm-swedens-exports-professor-warns-1100796120.html
sweden
scandinavia
Sputnik International
feedback@sputniknews.com
+74956456601
MIA „Rossiya Segodnya“
2022
News
en_EN
Sputnik International
feedback@sputniknews.com
+74956456601
MIA „Rossiya Segodnya“
Sputnik International
feedback@sputniknews.com
+74956456601
MIA „Rossiya Segodnya“
sweden, scandinavia, newsfeed, inflation, currency, interest rates
sweden, scandinavia, newsfeed, inflation, currency, interest rates
Sweden Braces for 'Monster' Interest Rate Hike to Tame Raging Inflation
Sweden's decades-high inflation rate has been exacerbated by a weakening krona, which has recently lost ground against the euro and is the second-worst performer among major currencies this year. Central Bank Governor Stefan Ingves stressed that Sweden has never been so far from its inflation target, ditching the “wait and see” approach.
The Riksbank, Sweden's Central Bank, is poised for its largest interest hike in nearly three decades, with a decision to be announced later this week.
While the Stockholm-based bank is tipped to introduce a 0.75 percent increase, dubbed a “monster hike” by the Swedish press, an even bigger move cannot be excluded.
Dagens Industri, Sweden's leading economic daily,
recommended a full 1 percent hike. Either variant would constitute the largest increase since the current policy regime, with a 2 percent inflation target, was introduced in 1993.
A 1-percent hike would place Sweden among the top ten economies with the world's most-traded currencies to make such a move this year, second only to Canada.
A major increase of the interest rate would also come at a time when Sweden is struggling with record inflation, which has reached historic proportions. At 9 percent, it is at its highest point in several decades, and has been well above the Central Bank’s forecasts for nearly a year in a row.
Riksbanken Governor Stefan Ingves conceded earlier this month that incremental rate hikes may no longer suffice and said that previous plans for a 0.5 percent increase are no longer valid.
“In a 30-year perspective, we have never had so high inflation as we have today and we have never been so far from the inflation target as we are today”, Ingves said earlier this month, as quoted by Reuters.
The Scandinavian bank Nordea envisaged a 0.75 percent increase in the interest to be announced followed by another 0.5 percent hike to a total of 2 percent at the end of the year.
Sweden's inflation woes are exacerbated by a weakening krona, which in recent months has lost more ground against both the euro and the dollar and is the second-worst performer among major currencies this year.
Some specialists, including Swedbank Chief Economist Mattias Persson, have warned against too large a hike, stressing that it could further hurt households, which are already postponing major spending amid a cost-of-living crisis and elevated energy costs, as well as businesses, which are slashing expenditures.
15 September 2022, 07:16 GMT
Earlier, outgoing Social Democrat Finance Minister Mikael Damberg warned that ballooning public debt would “add fuel to inflation and further raise interest rates and could also threaten public finances and threaten welfare and pensions.”
Last week, the New York Stock Exchange suffered one of its worst losses in recent memory after investors reacted to a inflation report by selling off stocks. This prompted forecasts that the US Federal Reserve is to make its biggest increase in interest rates by a full percent, a move likely to be copied by other nations.
