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Jan 28, 2015

Sweden’s unconventional monetary policy would be no bazooka

STOCKHOLM, Jan 28 (Reuters) – Sweden’s central bank may be
the next to adopt unconventional policies to fight falling
prices, but it is unlikely to match the impact of others as the
bond market is small, yields are low and banks are already flush
with cash.

The European Central Bank said last week it would pump
billions of new money into the financial system through
sovereign bond purchases, part of a plan to launch a “big
bazooka” to revive the economy. The U.S. Federal Reserve and
Bank of England have taken similar steps.

Jan 21, 2015

Teenager says he escaped N.Korea and made it to Sweden, claims asylum

STOCKHOLM/SEOUL (Reuters) – A 17-year-old who says he is a street child from North Korea is seeking refugee status in Sweden, maintaining he walked across a frozen river into China and traversed two continents in cars, the trans-Siberian railway and the back of a truck.

But he offers no evidence to back his claims and Swedish authorities suspect he may be Chinese.

Dec 30, 2014

Swedish compromise politics risks pushing voters to far right

STOCKHOLM (Reuters) – A deal between Sweden’s mainstream political parties aimed at neutralizing the far-right and avoiding a snap election could backfire by legitimizing the nationalist Sweden Democrats as the main opposition and focusing debate on immigration.

Last week’s unprecedented accord between the center-left and center-right cements their hold on power by making it easier for minority governments to pass a budget.

Dec 19, 2014

Swedish central bank picks academic to board, limited policy impact seen

STOCKHOLM, Dec 19 (Reuters) – Sweden’s central bank said on
Friday it has picked Uppsala University professor Henry Ohlsson
to replace policy board member Karolina Ekholm, in a move
analysts said was unlikely to affect the bank’s current policy.

The Riksbank has come under fierce criticism in recent years
for cutting rates too slowly to address persistently low
inflation, including in June from the Economic Council of
Swedish Industry of which Ohlsson was chairman.

Dec 16, 2014

Riksbank keeps key Swedish rate at zero, readies new expansionary measures

STOCKHOLM, Dec 16 (Reuters) – Sweden’s central bank left its
key interest rate unchanged at zero percent on Tuesday,
signalling its worry over persistently low inflation by pushing
back forecasts for future rate increases and saying it was ready
to act with other measures if needed.

The central bank surprised markets in October by cutting
rates to zero from 0.25 percent, lower even than at the height
of the financial crisis in 2008-9.

Dec 12, 2014

Lack of ideas, leadership in Swedish politics may benefit far right

STOCKHOLM (Reuters) – Sweden’s mainstream parties head into March’s snap election unloved by voters and short on seasoned leadership, raising the risk the far-right will increase its support and be able to force a shift in generous immigration policies.

Center-left Prime Minister Stefan Lofven’s need to call a new election two months into office underlines his weakness. His likely rival for the top political post – Moderate party economic spokeswoman Anna Kinberg Batra – will not even head her own party until January.

Dec 4, 2014

Swedish far-right makes big gamble to shed pariah status

STOCKHOLM (Reuters) – Sweden’s far-right is gambling its political future in pitching the country into snap elections, calculating disaffection with established parties and fears over immigration can further its meteoric rise from a pariah-like obscurity to mainstream power.

But voters may yet punish the Sweden Democrats, who want to cut asylum seekers by 90 percent, for tipping the balance in a vote over the budget on Wednesday and forcing a Social Democrat-Green coalition to call polls after only 2 months. Turmoil is an alien spectacle in Swedish political culture.

Dec 3, 2014

Losing grip on power, Swedish government faces budget defeat

STOCKHOLM (Reuters) – Sweden’s minority government looked certain to lose a budget vote on Wednesday as the anti-immigration Sweden Democrats flexed their political muscles – a move that may force Prime Minister Stefan Lofven to call a snap election.

The far-right group has held the balance of power since September’s election and plan vote with the main opposition bloc on the budget.

Nov 27, 2014

After zero rates, Sweden ponders next steps to avoid deflation

STOCKHOLM, Nov 27 (Reuters) – What should a central bank do
next when it already has zero interest rates and arguably still
faces the threat of Japanese-style deflation? If it’s the
Swedish Riksbank, it should keep cutting, and do so soon, says
Lars Svensson.

Svensson no longer has a say; he quit as a deputy Riksbank
governor last year after failing to persuade fellow board
members to cut rates aggressively. Last month, they heeded his
advice, lowering the repo rate to 0 percent and pushing back the
official forecast for when the Riksbank will start tightening
monetary policy again to mid-2016.

Nov 9, 2014

Sweden grapples with massive household debt as rates hit zero

STOCKHOLM, Nov 9 (Reuters) – Sweden’s new centre-left
government and its financial authorities are under huge pressure
when they meet on Tuesday to tackle a mountain of household debt
that is casting a long shadow over one of Europe’s few economic
bright spots.

Having slashed rates to zero to fight the risk of deflation,
top Swedish officials are now in a quandary over how to rein in
borrowing and house price rises without sending the real estate
market into a downward spiral.