STOCKHOLM, March 3 (Reuters) - Sweden’s central bank should be cautious about returning to negative interest rates if there is a major economic downturn, Riksbank Deputy Governor Anna Breman said in a speech on Tuesday.
Breman said in the text of a speech published by the central bank that zero - the current level of the repo rate - should not be a lower bound, but that other policy measures could be more appropriate.
“I ... consider that we should exercise caution with regard to reintroducing a negative policy rate, and that the effects of this should be weighed against the advantages and disadvantages of extended bond purchases and other monetary policy tools,” Breman said.
At its February meeting, the Riksbank held its benchmark rate at zero percent and said it expected policy to remain unchanged for the coming years.
Reporting by Stockholm Newsroom; editing by Niklas Pollard