this, the Riksbank decided on Tuesday on a package of measures to tackle the economic impact of the coronapandemin.
”in Order to support economic development and avoid problems in the supply of credit will lead to a further deterioration of the economic consequences of the pandemic, the executive board adopted a package of measures,” wrote the Riksbank in a press release.
One of the measures is to buy assets for up to $ 300 billion over the course of the year. If necessary, these securities may include both government, municipal and mortgage-backed securities.
it was the former head of the Swedish central government debt. He says to dagens nyheter that it is good that the Riksbank, in taking the action they are doing at this point. In particular, the purchase of a municipal bond could have a positive effect.
"What is it that is here, and it's a very positive move, as they previously only purchased the government bonds," he said.
Thomas Olsson says that it is in the nature of the crisis, will not be able to borrow money for the state, as Sweden has the lowest levels of public debt.
" on the other hand, it is not clear how other markets will react. We don't know how house prices are going to be developed, or if there are any questions about the loan losses in the banking sector. And so, spontaneously, I would say that it would be useful to prioritize the right to housing, and municipal bonds.
these are the big decisions, and Thomas Olofsson argues that it would be reasonable to announce this order at this time.
"the Riksbank will have to weigh the impact on the market, it is important that the debt office has access to a liquid market and may be adversely affected by the purchase of a lot of treasuries," he said.
" the Stimulus from the Swedish central bank, but, above all, by the government, is a positive one. However, it must be borne in mind that in general incentives do not have a significant effect on the people is not going to work, or did not dare to go to a restaurant and stay in a hotel. What people don't do this more often, to central bank buying of bonds, said Thomas Olofsson.
He is referring to is that the government is doing that will have the greatest impact.
" You have to have a realistic view: this is not a decisive factor. However, it is important that the credit channels work, and that's the nature of the measures of a preventive effect in that it can reduce the uncertainty surrounding the disruptions in the financial markets. As an addition, this is important.
if you need up to 300 billion sek, the Riksbank's measures, among other things, to reduce the marginal lending rate of the overnight loan to the bank from 0.75 to 0.20 percentage points higher than the repo rate. It also provides the banks on weekly basis to borrow an unlimited amount of money in return for collateral, with a maturity of three months at an interest rate of 0.20 percentage points higher than the repo rate.<