Riksbank sits back, lets SEK do the work - TDS

Research Team at TDS, notes that the Riksbank kept its policy rate on hold at –0.50%, as had been unanimously expected, but repo rate forecasts were more hawkish than we had been looking for.

Key Quotes

“The Riksbank seems to be happy at this stage to let the currency do all the heavy lifting, as it sees the depreciation in SEK dampening the negative effects on growth and demand from the UK Referendum outcome.

The odds of another Riksbank cut this year appear to be close to 50-50, but as long as the Swedish krona remains on the back foot we think that the Riksbank can afford to keep rates on hold.”