MNI BRIEF: Riksbank Hikes 50bps; Front-Loads Tightening

The Riksbank delivered its widely expected 50 basis point hike, taking the Policy Rate to 0.75%, at its June meeting and published a projected rate path that showed it front-loading tightening.

The newly renamed Policy Rate was shown rising to close to 2% by the start of the next year and then only drifting up very gradually, to stand at 2.06% at the end of the three year forecast period. The profile suggests tightening at each meeting through early 2023 and leaves the door open to another 50 bps hike.

The central bank also n April, the Executive Board decided that the Riksbank should purchase bonds for SEK 37 billion in the second half of the year. The Executive Board also cut to the pace of bond purchases further, halving planned H2 buying SEK 18.5 billion, with the balance sheet shrinking due to natural run-off.