Riksbank cuts key rate and expands QE to curb krona risks

Photo by David Lundberg
Sveriges Riksbank

Sveriges Riksbank cut its repo rate to -0.35% and extended its quantitative easing programme by 45 billion krona ($5.3 billion) today (July 2), to defend against the risks of a stronger currency and Greek collapse.

Annual CPI inflation rose to 0.1% in May while the Riksbank's preferred measure, CPFI, which corrects for the impact of monetary policy on mortgage rates, rose to 1%.

The Riksbank expects CPIF to reach 2% by the end of 2015, but is concerned a stronger-than-expected krona would risk "b

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