Riksbank cut to keep SEK under pressure for now – Lloyds Bank

Economists at Lloyds Bank, expect Sweden’s Riksbank to cut its policy rate by 10bp to -0.45% in response to the impact of lower oil prices on the inflation path and the likely easing of ECB policy in March.

Key Quotes

“We also suspect intervention remains on the table, although with SEK weakening by around 3.5% against the EUR since the start of the year, concerns over the exchange rate should have lessened somewhat. Stressful market conditions have been challenging to our constructive view on the SEK this year and to the extent that a rate cut on Thursday is not fully priced in we expect a decline in response to today’s policy decision.”