Sweden: Riksbank keeps rates steady in February, continues to signal hike in H2
At its 12 February monetary policy meeting, the Riksbank left the repo rate unchanged at minus 0.25%, as markets had expected.
The Riksbank’s decision came after a rate hike in the previous meeting in December last year. Moreover, in recent months CPIF inflation has remained fairly close to the 2% target, while monthly indicators suggest that underlying economic momentum is gradually moderating. This led the Bank to conclude it was premature to continue its tightening cycle at the current meeting.
In its press release, the Riksbank reiterated its previous guidance that the next rate hike will likely come in the second half of 2019, expecting monetary policy to tighten to the same extent as in December. The Bank sees the repo rate averaging 0.10% in Q1 2020 and 0.60% in Q1 2021. The Bank also maintained its cautious tone and once more highlighted downside domestic and external risks to the outlook.