Interest Rate

The benchmark interest rate in the economy is a measure of the cost of money and the general economic activity and perception of the central bank about the state of the economy, the target inflation rate and is the most important monetary policy tool. In Sweden, the central bank named Sveriges Riksbank held its benchmark interest rate at -0.5 percent on December 20th, 2017, saying monetary policy needs to remain expansionary for inflation to continue to be close to the 2 percent target.
Also, the central bank added that it expects to begin slowly raising the repo rate in the middle of 2018. Interest Rate in Sweden averaged 3.22 percent from 1994 until 2017, reaching an all-time high of 8.91 percent in July of 1995 and a record low of -0.50 percent in February of 2016. The central bank in Sweden has expressed concerns about the low inflation rate and the possibility of the appreciation of the Swedish Krona, although economic activity is strong.
A negative interest rate in the economy implies that the cost of money is very cheap, and while this can add positively to the economic growth, it poses risks for the economy especially for the debt levels of the consumers and businesses, which should be kept in logical levels to avoid any possible financial bubbles in the economy, especially in the housing market.