Swedish Krona: Riksbank hawkish hold backs currency – BBH
Brown Brothers Harriman’s (BBH) Elias Haddad reports the Swedish Krona (SEK) rallied after the Riksbank delivered a hawkish hold, keeping rates unchanged but signaling more tightening ahead.
The Swedish Krona (SEK) experienced a rally following the Riksbank's hawkish statement, keeping the policy rate unchanged at 1.75% but signaling more tightening ahead. Brown Brothers Harriman's Elias Haddad reported that the new rate path suggests nearly 75 basis points of hikes over the next year, aligning more closely with market expectations.
This firmer policy stance bolstered the SEK against major currencies. The Riksbank maintained its policy rate at 1.75% for an eighth consecutive meeting, with the bank emphasizing that "the policy rate should be raised more going forward than projected in the June forecast" and confirming that "the increases to the policy rate will begin this year."
The resulting forecast implies a nearly 75 basis points of tightening in the next twelve months, bringing its rate outlook closer to the 125 basis points priced by markets.
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