Sweden: Riksbank sitting on the ground – TDS

The Riksbank kepts its policy rate on hold at 0.00%, as had been unanimously expected. There was no change in the repo rate forecasts, and little market reaction to what was a very uneventful meeting, strategist’s at TD Securities Jacqui Douglas reports. USD/SEK is losing 0.11% this morning.

Key quotes

“The Riksbank maintains its view that the policy rate will remain unchanged at 0.00% up until the tail-end of its forecast horizon.”

“The macro forecasts saw GDP growth revised up a tenth for 2020 (to 1.3%) and 2021 (to 1.8%), while CPIF was revised 0.4ppts lower for 2020 on lower energy prices (to 1.3%) but unchanged for 2021 at 1.7%.”

“The Riksbank is comfortably on hold for the foreseeable future. While we believe that the macro data justifies a rate cut, the Riksbank will be loathed to push rates back into negative territory short of an outright recession at the very least.”