Swedish Central Bank Holds Rate
STOCKHOLM--Sweden's central bank Thursday left its most important interest rate unchanged but lowered its forecast for the coming months, prompting the krona to weaken against the euro on the prospect of lower rates.</br></br>The Riksbank said its six-member executive board voted at a policy meeting Wednesday by four to two to leave the repurchase rate, or repo rate, at 1.25%, in an effort to balance concerns over the level of household debt with consistently below-target inflation and slowing economic growth. The move was expected by nine out of 10 economists polled by Dow Jones Newswires.</br></br>But the forecast move makes a rate cut at the next policy meeting in December more likely than previously thought.</br></br>The prospect of lower interest rates weighed on the Swedish currency during Thursday morning trading local time. The krona weakened against the euro from 8.66 kronor to 8.68 kronor.</br></br>Exporting companies have called for a lower repo rate to sap the recent strength of the Swedish krona, which hit a 12-year high against the euro over the summer. They worry that companies with costs denominated in kronor are losing competitiveness compared with their euro-zone rivals.