FXStreet (Delhi) – Ned Rumpeltin, European Head of Currency Strategy at TDS, notes that after the Riksbank maintained status quo on its monetary policy will mark the end of its current easing program.
Key Quotes
“As expected, the Riksbank left its monetary policy stance unchanged, maintaining the Repo rate at -0.35% and QE on schedule to complete SEK135B in purchases by the end of 2015.”
“Text accompanying the release marked a clear change in tone, with the Riksbank acknowledging that economic activity in Sweden is improving and inflation is now on a clear upward trend.”
“Given the shock to oil prices, the forecasts for CPI and CPIF were revised down over the near-term, with headline inflation revised down by 0.2 ppt over 2015 and 2016.”
“Broadly speaking, we think this marks the end of the Riksbank’s current easing program. The central bank will be content seeing growth and inflation picking up in an environment of a weaker Krona. This is exactly what they wanted with QE and a negative Repo rate, and should economic conditions evolve broadly as forecasted, their next policy move will be an increase in interest rates in late 2016.”
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