Sweden’s central bank is to buy more bonds to drive down longer yields as policymakers try to fight currency gains that threaten to undermine their efforts to rekindle inflation.
The Riksbank kept its benchmark repo rate at minus-0.5 percent, it said yesterday.
The central bank said it would add 45 billion kronor (US$5.6 billion) to its quantitative-easing program, including inflation-linked bonds, to be purchased during the second half of the year.
“With continued expansionary monetary policy abroad, there is a risk that the krona will appreciate earlier and faster than in the forecast,” the Riksbank said in a statement. “This could dampen growth and inflation in Sweden and affect confidence in the inflation target.”
The additional quantitative easing is to be split into 30 billion kronor on nominal government bonds and 15 billion kronor on inflation-linked notes.
The extra purchases are to add to an existing 200 billion-krona quantitative-easing program targeting about one-third of Sweden’s nominal government bonds by the end of June.
Andreas Wallstroem, an economist at Nordea Bank AB, said his “main scenario is that we will see no additional easing measures from the Riksbank in this cycle.”
Nordea forecast that the first rate increase would come in the second quarter of next year.
“However, as we don’t see that inflation will rise to the 2 percent target within the forecast horizon, further easing measures cannot be ruled out,” it said.
Wallstroem said that measures by other central banks will be key in determining the Riksbank’s policy.
The European Central Bank was due to publish its rate decision later yesterday, with economists surveyed by Bloomberg predicting it would keep rates unchanged.
“Although inflation is rising, the upturn is fitful,” the Riksbank said. “At the same time, there is still uncertainty over global developments, and monetary policy abroad is very expansionary.”
The bank has sought to extend its macro-prudential powers, despite opposition from both the financial regulator and the debt office.
In a recent study of Sweden’s monetary policy coauthored by former Bank of England governor Mervyn King, greater coordination between monetary and regulatory policy is suggested as a way to tackle Sweden’s financial-market challenges.
“The Riksbank has highlighted the risks associated with the low interest rates in Sweden and abroad on many occasions,” the bank said. “To reduce the risks linked to household indebtedness, different reforms are needed that both create a better balance between supply and demand on the housing market and reduce the incentives or scope for households to take on debt.”
In related news, Indonesia’s central bank paused its monetary policy easing ahead of adopting a new benchmark interest rate in August aimed at spurring lending and growth in Southeast Asia’s biggest economy.
Bank Indonesia yesterday kept the reference rate at 6.75 percent. The bank also left its lending facility rate at 7.25 percent and deposit facility rate at 4.75 percent.
Under Indonesian government pressure to boost flagging economic growth, the bank has shaved 75 basis points off the reference rate this year. Average bank lending rates have not fallen by nearly that much, prompting the monetary authority to overhaul its policy.
Policymakers set the new benchmark — the seven-day reverse repo rate that is to come into effect in August — at 5.5 percent.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained