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- Riksbank to deliver 75 bps, effect on the krona to be limited – Commerzbank
Riksbank to deliver 75 bps, effect on the krona to be limited – Commerzbank
The Riksbank will have to take action again next week. Economists at Commerzbank expect a 75 basis points (bps) rate hike, however, the krona is set to shrug off the movement.
Uncertainty in government formations usually leaves the krona unaffected
“I assume that it will hike its key rate by 75 bps on Tuesday to then 1.50% while at the same time adjusting the rate path to the upside. The market is also pricing in 75 bps for next week so the effect on SEK is likely to be limited. Otherwise, the Riksbank would have to sound very hawkish, signalling key rates to peak at much higher levels. That, in turn, seems unlikely in view of economic risks.”
“The possible change of government after the parliamentary elections in Sweden on Sunday should only be a side note for the FX market. Uncertainty is nothing new in government formations in Sweden and usually leaves the krona unaffected. But even if the change takes place quickly this time, I don't expect it to have much effect on the SEK.”
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