FXStreet (Edinburgh) – Strategist at TD Securities Rich Kelly reviewed the decision by the Riksbank at today’s meeting.
Key Quotes
“Against our expectations and the majority of consensus and market pricing, the Riksbank once again delivered very aggressive easing”.
“The Riksbank cut the repo rate a further 10bps to –0.35%, extended QE from September to end-year, and further reduced the repo profile to show the risk of a further 6bps of cut by November”.
“The driving factors appear to be a downgrade in the inflation profile over the next three years, and some mention of near term uncertainties regarding Greece”.
“Although we had a dissent against the rate cut, the Riksbank continues to be aggressive in trying to limit SEK appreciation”.
“Deputy Ohlsson entered a reservation against the decision to cut rates, but overall, the Riksbank showed no signs that they have reached the lower bound”.
“At the margin, if Greece worries dissipate and the Swedish recovery continues, today’s decision increases the chances they could actually start to tighten policy the second half of 2016. But for now, that is not on the radar”.
(Market News Provided by FXstreet)