Bonds purchase program is increased to 700 billion crowns
The Swedish central bank is significantly expanding its bond purchases amid the second wave of the corona crisis. The Riksbank announced on Thursday in Stockholm that the volume of the purchase program will be increased by 200 billion to 700 billion crowns (around 69 billion euros). Many analysts had expected an increase, but mostly expected a smaller increase. The Swedish krona reacted to the decision with losses.
The purchases are expected to be completed by the end of 2021. The monetary policy committee, however, was not in agreement: two members voted against the resolution: one member argued for a lower increase, another member did not want to support the additional security purchases. In addition to conventional government bonds, the central bank also wants to buy so-called green securities. Such bonds are intended to finance environmentally friendly goals. They are on the rise.
In contrast, the central bank left its key interest rate at zero percent, as expected. Sweden, like other European countries, suffers from a second virus wave. The country had originally taken a gentle approach to the pandemic and adopted few restrictions on public life as a countermeasure. In the meantime, however, the restrictions are tougher, which is putting a strain on the country's economy.
