MNI BRIEF: Riksbank Cuts 25bps, Opens Door To More Cuts
MNI (LONDON) - The Riksbank cut its policy rate 25bps to 3.25% from 3.5% and said that it now expected to cut faster than it had previously anticipated, with a 50bps cut at an upcoming meeting a clear possibility.
Analysts had unanimously anticipated the 25bps cut but the Riksbank has stepped up its plans for further easing, shifting policy in a markedly more expansionary direction. (see MNI RIKSBANK WATCH: Riksbank Set For Third 25bp Cut This Cycle )
If things unfold as expected "he policy rate may also be cut at the two remaining monetary policy meetings this year. A cut of 0.5 percentage points is possible at one of these meetings," the Riksbank Executive Board stated, with the rate path compatible with one or two further cuts in the first half of next year. The Riksbank's rate path showed the policy rate falling to 2.4% next year, down from 2.9% in the previous forecast, and to 2.3% three years ahead, down from 2.7%.