MNI BRIEF: Riksbank Holds On Rates, Not Ruling Out H1 Cut

The Riksbank left its policy rate on hold at 4.0%, as widely expected, and stepped up the pace of asset sales and delivered surprisingly dovish guidance, stating that it could ease policy earlier than previously expected and that it did not rule out a rate cut in the first half of the year. (MNI RIKSBANK WATCH: Rates Seen On Hold, QT Pace Stepped Up)

The Executive Board said it now believed that there was a lower risk of inflation becoming embedded at high levels, which leaves the door open to an earlier rate cut.

The board also announced its well trailed increase in the pace of asset sales. It said that from February it would increase the sales of nominal government bonds from SEK 4.2 billion to SEK5.7 billion per month from SEK4.2 bn, leaving the pace of linker sales unchanged to take total monthly sales up to SEK6.5 bn from SEK5 bn.