MNI BRIEF: Riksbank Board United In Seeing More Rate Cuts

The Riskbank Executive Board united in backing the 0.25 percentage point rate cut to 3.75% in May, supporting the bank's projection that the policy rate can probably be cut two more times in 2024 although they all argued that krona weakness, in part linked to dollar strength due to higher US rate paths, posed a risk to the central projection of declining domestic inflation and easier monetary policy, the minutes revealed.

Anna Breman said that there was now a risk of inflation undershooting and needed to be monitored closely. Aino Bunge said that the krona posed an upside inflation risk , while Per Jansson said that while it was encouraging that expectations for ECB rate cuts were relatively stable, with a first cut in the summer, the volatility of US rate expectations could have significant effects,

Governor Erik Thedeen also said higher international interest rates, through their effects on the krona, posed a risk to Swedish inflation. (See MNI INTERVIEW: Fed, ECB Cloud Riksbank Easing Outlook- ThedeenThedeen).