Swedish central bank raises repo rate 0.25 percentage points

Sweden's central bank, the Riksbanken, Wednesday raised its repo rate 0.25 percentage points to 1.75 percent, the bank said.


"The Riksbank has decided to raise the repo rate by 0.25 percentage point to stabilize inflation, close to the target of 2 percent and avoid resource utilization becoming too high," the bank said in a statement.


High energy and commodity prices will contribute to higher inflation in Sweden during the forecast period. At the same time, CPI inflation is high at the moment as a result of rising mortgage rates.


The overall picture of economic prospects remains largely the same as in February and the forecast for the repo rate is therefore unchanged, the statement said.


The bank held that growth in the world as a whole remains high, despite the natural disasters in Japan and the political unease in North Africa and the Middle East.


Developments in Asia are particularly strong, but Europe and the United States are also continuing to recover. However, the strong developments in Asia and unease in the oil-producing countries are leading to an increase in energy and commodity prices.


Prospects in Europe are still uncertain, as a result of fiscal problems in several European countries, the statement said.
(Source:http://news.xinhuanet.com)