Sweden's Central Bank drops deposit interest rate to negative

Daal · Jul 6, 2009

Banks now need to pay to hoard reserves
http://www.creditwritedowns.com/2009/07/sweden-negative-interest-rates-and-quantitative-easing.html

Martinghoul · Jul 6, 2009

There's a thread on this already, isn't there?

nazzdack · Jul 6, 2009

Quote from Daal:
.....hoard reserves.....

Is the Swedish equivalent of the Fed Funds futures trading above "par"? :eek:

Daal · Jul 6, 2009

Quote from nazzdack:

Is the Swedish equivalent of the Fed Funds futures trading above "par"? :eek:

Looks like Swedish 1M government bills are yielding 0.2%, if I'm reading the central bank data correctly. Couldn't find a futures for their overnight rates

Martinghoul · Jul 6, 2009

Quote from Daal:

Looks like Swedish 1M government bills are yielding 0.2%, if I'm reading the central bank data correctly. Couldn't find a futures for their overnight rates

STINA is fixing arnd 25bps with 1wk at arnd 30bps. As mentioned in the other thread, the negative CB depo rate doesn't actually mean that anything will trade there.

PS: There are no futures in SEK money mkt. It's all OTC, i.e. FRAs and OIS swaps.

nazzdack · Jul 6, 2009

Quote from Daal:
Couldn't find a futures for their overnight rates

The Swedes are neanderthals.

Daal · Jul 6, 2009

Quote from Martinghoul:

STINA is fixing arnd 25bps with 1wk at arnd 30bps. As mentioned in the other thread, the negative CB depo rate doesn't actually mean that anything will trade there.

But if affects the other rates. the bankers will try to get rid of excess reserves

Martinghoul · Jul 6, 2009

Quote from Daal:

But if affects the other rates. the bankers will try to get rid of excess reserves

Yes, and the hope is that instead of depositing it at the Riksbank and paying 50bps negative carry the banks will lend it out term, which is the whole point of all the shenanigans.

ASusilovic · Jul 6, 2009

Quote from Martinghoul:

Yes, and the hope is that instead of depositing it at the Riksbank and paying 50bps negative carry the banks will lend it out term, which is the whole point of all the shenanigans.

Yes. Yes. Yes.

ASusilovic · Jul 6, 2009

Quote from nazzdack:

The Swedes are neanderthals.

Sorry, nazz,

have to correct you : they are "Vikingrs"...