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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.

via BBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza