Mats Hydén, analyst at Nordea Markets, notes that Riksbank increased the policy rate by 25 bps to zero while the repo rate path was left unchanged.
Key Quotes
“The reservations from two board member was slightly on the dovish side to expectations. At the same time, wording in the press release on future policy options was unchanged from October. This was a bit more hawkish than our expectations, but close to market expectations. Not a soft hike, but a rather neutral hike. Unclear implications for FX and rates.”
“Escape from negative interest rate may be a driver of the decision.”
“We believe in an unchanged repo rate throughout 2020.”
“QE: No change. 45 bn will be bought between July 2019 and December 2020 (40 bn nominals and 5 bn linkers).”
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