Riksbank: Another cut in the repo rate? – Unicredit

Research Team at Unicredit, suggests that the Riksbank meeting on Thursday will likely attract attention, given market speculation about another cut in the repo rate.

Key Quotes

“We think that the Swedish central bank will trim its inflation forecast for 2016 but we do not expect a rate cut at this time, as inflation developments may not be considered significant enough to warrant further easing at this stage.

We anticipate a dovish communication (and indications of further easing later), which should prevent EUR-SEK from dropping materially below 9.35 in the near term. That said, we do expect ongoing downside pressure on USD-SEK, on account of general dollar overvaluation.”