STOCKHOLM—Sweden’s central bank kept key policy unchanged on Tuesday and forecast the benchmark repo rate would remain at zero in coming years, showing little sign of being in a hurry to tighten monetary conditions despite a rapid recovery from the pandemic. Sweden’s gross domestic product is back to its pre-pandemic size, inflation has topped the 2 percent target and with public restrictions coming to an end, growth is expected to remain strong. Fiscal and monetary policy, however, remain ultra-loose and the Riksbank is reluctant to change course. “It is important that … we continue with the expansionary monetary policy so that inflation is sustainably at our target of 2 percent,” Governor Stefan Ingves told reporters. Tweaking policy, the Riksbank said lending facilities that were launched during the pandemic will be closed immediately and pre-pandemic collateral requirements reinstated at the end of the year. The central bank said it expected to …
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