February 15, 2012 by staff
Stockholm, Sweden, Sweden’s central bank will probably cut its benchmark interest rate this week to keep the largest Nordic economy from sliding into a recession as Europe’s debt crisis buffets exports.
The Riksbank will lower its repo rate by a quarter of a percentage point to 1.5 percent, according to 13 of the 18 economists surveyed by Bloomberg. Five predicted no change. Policy makers at the Stockholm-based bank are meeting today and will announce their decision at 9:30 a.m. local time tomorrow.
“All the arguments are in place for a rate cut,” said Roger Josefsson, chief economist in Stockholm at Danske Bank A/S. “The momentum in the economic data is incredibly negative right now.”
Sweden’s trade surplus shrank to its narrowest in more than a year at the end of 2011 and manufacturing confidence hit a 28- month low in January as exporters endure the fallout of Europe’s debt crisis. The National Institute of Economic Research predicted in December that Sweden’s economy will stall, requiring rate cuts that will send the benchmark as low as 0.75 percent this year.
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