Swedish Riksbank: Tapering complete? - ING

The Riksbank’s QE purchases are set to run until the end of the year and seem unlikely to be extended further, according to analysts at ING.

Key Quotes

“Three out of six MPC members voted against the two latest asset purchase extensions. As the domestic data continues to improve and the major central banks inch towards tightening policy, an extremely loose monetary policy in Sweden looks increasingly hard to defend.”

“But the Riksbank will be wary of getting too far ahead of the ECB, which, awkwardly, will announce policy just a few hours later on Thursday. Concerns about external factors pulling down on Swedish inflation is the key factor behind the Riksbank’s accommodative stance.”

“So look for communication to remain dovish and the Riksbank’s forecast for interest rates to remain largely unchanged (first rise in mid-2018). It may also extend the delegated mandate for currency intervention (which hasn’t been used but has some signalling value).”