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The Swedish central bank (Riksbank) wouldn’t face any legal problems if it were to decide to start buying corporate bonds, Deputy Governor Henry Ohlsson said on Tuesday.

Ohlsson further explained that preparations would be needed first amid low liquidity and poor visibility in markets.

Regarding the inflation outlook, Ohlsson argued that factors pushing down inflation were temporary.

Market reaction

The EUR/SEK pair, which fell to its lowest level of 2020 at 10.4138 on Monday, is edging higher after these comments and was last seen gaining 0.45% on the day at 10.4589.