Swedish central bank cuts rate path, sees rates low in 2012

STOCKHOLM: Sweden's central bank said on Wednesday that its key repo rate would remain low next year after cutting it by 25 basis points to 1.75 percent.

The Riksbank said problems in the euro zone would hit exports and household confidence and would lead to higher unemployment and lower growth.

"The repo rate is expected to remain low next year. Later on, when inflationary pressures increase, the repo rate will need to be raised gradually," the Riksbank said in a statement.

Deputy governors Karolina Ekholm and Lars Svensson wanted to lower the repo rate to 1.5 per cent immediately.

They also preferred a lower repo-rate path that stays at 1.25 per cent from the second quarter of 2012 through the third quarter of 2013.