Stefan Ingves, governor of the Swedish Riksbank has warned that the current repo rate of -0.5% could fall further into negative territory.
His comments were reported after the central bank announced that it was maintaining the repo rate unchanged, in light of uncertainties in the global economy, and despite signs that the Swedish economy remains relatively strong.
No change to the repo rate is predicted before mid-2017, the bank added. Meanwhile, its asset purchase programme will continue through 2016, taking full-year purchases to some SEK245bn (€xx ).
The bank said the repo rate could fall to -0.52% by the fourth quarter of 2016.
Key dangers the bank identifies include uncertainty following the Brexit referendum, weak European banks, and the direction of the krona.