Sweden's Riksbank will not increase interest rateslevels although world economy seems to be speeding up.

The Swedish central bank is not ready to hike its key interest rate levels from record low 0.25 percent in the near future although there are clearer signs that the world economy is beginning to recover, financial markets are gradually functioning better and the need for extraordinary measures are declining, First Deputy Governor Svante Öberg said in a speech at Lund University Tuesday.

Several Swedish banks have urged the Riksbank to rise interest rate levels this spring in order to prevent a swelling bubble on the housing market. But the central bank will not lift the level until next autumn, the earliest.

“As the financial sector stabilises, the need for extraordinary measures will decline. According to the forecast we made in October, the repo rate will probably need to begin being raised in autumn 2010”, Svante Öberg said.

He also pointed out that the Riksbank, unlike many other central banks, has not purchased any securities, which makes phasing out the support measures relatively uncomplicated.

Sweden's GDP decreased by 5.0 percent in the third quarter, in working-day adjusted figures compared to the third quarter of 2008, the statistics office said Friday.

This means that the decline of the economy has came to an halt. Compared with the second quarter the economy increased by 0.2 percent.