Sveriges Riksbankprotokoll: More interest rate increases may be required to tame inflation (NYSEARCA: EWD)
Sweden’s monetary politicians believe that more interest rate hikes may be required to dampen inflationary pressures, according to minutes from the Riksbank’s June meeting which was released on Monday.
“I’m not sure that an interest rate level on 2% is enough to bring inflation down to our target, says Governor Stefan Ingves. “If needed later, more hikes are reasonable if that’s what it takes to reach our goal,” he added.
In the wake of rising consumer price inflation, Sweden’s central bank most recently raised its key interest rate by 50 basis points to 0.75% with a terminal interest rate of almost 2% at the beginning of 2023. But it is rising in borrowing costs, which is a more pronounced movement may not be enough to solve the inflation problem.
Similarly, Deputy Governor Anna Breman said “the risk picture is on the downside for growth and on the upside for inflation”, adding that “we must be prepared for the possibility that the return to low and stable inflation will be painful for the Swedish economy and demand further measures from the Riksbank. “
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