Reference rate

The Riksbank has set the reference rate for the period 1 January-30 June 2007 at 3.0 per cent.

The reference rate is equivalent to the repo rate that applied immediately prior to the calendar half-year during which the reference rate is to apply. If the repo rate is not a whole or half number, the reference rate is rounded up to the nearest half a percentage point.

The reference rate replaces the former discount rate, which was set by the Swedish National Debt Office.

Date | Reference rate |

01/01/2007 | 3.00 |

01/07/2006 | 2.50 |

01/01/2006 | 1.50 |

01/07/2005 | 1.50 |

01/01/2005 | 2.00 |

01/07/2004 | 2.00 |

01/01/2004 | 3.00 |

01/07/2003 | 3.00 |

01/01/2003 | 4.00 |

01/07/2002 | 4.50 |

Who sets the reference rates and on what basis?

The reference rate is set by the Riksbank at six-monthly intervals and is based on the repo rate applying at the end of the previous six-month period, rounded up to the nearest whole or half percentage point.

Where does the definition come from?

The definition is from an EC Directive on combating late payments to prevent delays in the settlement of business transactions.

How was the discount rate calculated?

The discount rate was based on the average of the 6-month rate and 5-year rate (fixing) during the previous quarter, with a deduction of 2.5 per cent.

What is the difference between the reference rate and the discount rate?

The discount rate reflected the development of both short and long rates with a deduction of 2.5 percentage points. The reference rate, on the other hand, reflects only the short rates.

Is there a difference in the level of the rates?

If you look back in time, the reference rate would have been just over 2 percentage points higher than the discount rate. The discount rate for the third quarter of 2002 would have been 2.5 per cent, which gives a difference of 2 percentage points.

Is this always the case?

It depends on the development of the long rates. As the reference rate only reflects the short rate, the hypothetical difference between it and the discount rate can vary if the long rates develop in a different way from the short rates.