Swedish Krona: Riksbank keeps hikes on table – BNY

BNY Mellon’s Geoff Yu reports the Swedish Riksbank left its policy rate at 1.75%, judging the stance well balanced amid stronger growth and inflation but a softer labor market. Underlying inflation is near 2% and summer readings beat forecasts. The bank’s broadly unchanged outlook still allows for a possible rate increase later this year if inflation persists.

Policy steady but tightening risk

"The Swedish Riksbank left its policy rate unchanged at 1.75%, saying the move was well balanced given a mixed backdrop of stronger-than-expected growth and inflation, alongside a weaker labor market and subdued company pricing plans."

"The Riksbank noted that summer inflation came in above its June forecast and that underlying inflation is close to 2%, while measured inflation remains low because of temporary fiscal measures."

"It also highlighted ongoing uncertainty from the Middle East conflict, though the economic impact so far has been smaller than feared."

"The bank said the outlook is broadly unchanged, but a rate increase later this year remains possible if inflation proves more persistent."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)