MNI BRIEF: Riksbank Cuts 25bps, Sees Two More In H2

The Riksbank delivered an expected 25 bps rate cut, taking the policy rate to 3.75%, saying if things unfolded as expected it anticipated two more rate cuts in the second half of the year.

In its March forecast the Swedish central bank's rate projection showed a rate cut in either May or June and its new guidance makes clear that having delivered the May cut that it will stay on hold In June and is likely to proceed with gradual cuts after that.

The board cited the weaker-than-expected inflation outturns, with inflation in March on the target CPIF coming in at 2.2 per cent and with core at 2.9 per cent, in support of the rate cut. It said that the data since March suggested that inflation would remain close to the target in the longer term.

Policymakers stressed the approach to easing would be cautious and gradual. The May meeting is not not that is accompanied by a fresh full forecast round.