The Effects of Monetary Adjustment on the Swedish Stock Market : An Event Study Analyzing the Effects of Monetary Changes in the Repo Rate Set by The Swedish Central Bank on the Stock Market.

Abstract: Between the years 2007 and 2019 Riksbanken, the Swedish central bank, have changed the repo rate 75 different times. This thesis will answer if these changes have an effect on the Swedish stock market for two specific sectors, the bank- and the real estate sector. With the use of the event study method to calculate the average abnormal return and cumulative average abnormal return. The objective of this paper is to find out whether a change has or has not had an effect on the Swedish stock market for the sectors. The results are significant for both sectors, when Riksbanken decides to decrease the repo rate, which says that there is an effect on our sectors’ stock prices. However, the results are only significant for the bank sector when it comes to increases in the repo rate.