A Nordic pioneer of negative interest rates gets cold feet
Dec 12th 2019THE WORLD’S oldest central bank, Sweden’s Riksbank, is a trendsetter. In July 2009, in the depths of the financial crisis, it was the first central bank to cut interest rates below zero. It set the global record, of minus 1.25%, for the lowest interest rate on deposits parked with it by domestic banks. Now, however, it looks set to bring the experiment to an end. On December 19th it is widely expected to leave negative territory, raising rates from minus 0.25% to 0%.Since the economy is in the doldrums, the rationale is unclear. Inflation is 1.7% and forecast to stay below the target of 2% for some time. Meanwhile, the most recent figure for annualised GDP growth was a paltry 1.1%, and the purchasing-managers index, a measure of business activity, is at its worst since the euro-zone crisis of 2012.Choose us for news analysis that respects your time and intelligenceSubscribe to The EconomistWe filter out the noise of the daily news cycle and analyse the trends that matterWe give you rigorous, deeply researched and fact-checked journalism. That’s why Americans named us their most trusted news source in 2017Available wherever you are—in print, digital and, uniquely, in audio, fully narrated by professional broadcastersThis website adheres to all nine of NewsGuard‘s standards of credibility and transparency.ORContinue reading this articleRegister with an email address