Riksbank Will be the First Central Bank to Cancel Negative Rates

Survey shows that the Swedish central bank may raise the negative interest rate to zero and become the only central bank to do so, though its not the first central bank to implement negative interest rates. This week's decision to raise interest rates may not be consistent with economic performance. Although the Swedish economy is not in a crisis, it is still slowing down.

Global economic growth has been sluggish throughout 2019, and most indicators point to a difficult fourth quarter. As inflation remains lower than the central bank's 2% target and the global outlook is also volatile, Riksbank is increasingly worried about the risks of downdraft that may arise from holding rates negative for too long. Housing price and borrowings have increased sharply, while investors are relying more on high-yielding assets, posing risks to the financial system.