April 29, 2020 / 8:33 AM / a month ago

Swedish c.bank's Breman: rate cut could have negative side effects

STOCKHOLM, April 29 (Reuters) - A rate cut at the present time would not have much positive impact on Sweden’s economy and could also have negative side effects, central bank Deputy Governor Anna Breman said on Wednesday.

Breman said a rate cut would have a less positive effect due to the nature of the crisis, caused by the new coronavirus and measures to hinder its spread.

“However, we must admit that there could be undesirable negative side effects of a repo rate cut right now,” she said in a speech.

“In the Monetary Policy Report, we have mentioned things such as how the exchange rate would be affected and what side-effects that would have, and it is necessary to consider how much an impact an interest rate cut would have on the general interest rate situation right now.”

Reporting by Simon Johnson and Johan Ahlander; editing by Niklas Pollard

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