Riksbank returns to risk management with rate cut to –0.50% - TDS

Research Team at TDS, notes that the Riksbank surprised a very divided consensus and market pricing by delivering a 15bps rate cut, taking the Repo Rate to –0.50%, though with two dissents for unchanged.

Key Quotes

“They continued to affirm a “high level of preparedness” to do more if needed, maintaining a 3bps easing bias into the second half of this year.

Moreover, they reaffirmed the conviction to intervene in FX markets if the pace of krona appreciation is too fast, while also mentioned they are looking at other measures that could underpin repo rate cuts, which may suggest some of the tiering structures being discussed elsewhere to allow the policy rate to be cut even more negative.”