MNI BRIEF: Riksbank Holds, Sees QE Stock Steady In 2022

The Riskbank left policy unchanged at its February meeting, but brought forward the projected timing of the first hike to H2 2024. There had previously been divisions on the Executive Board over the case for early non-reinvestment of maturing assets acquired through quantitative easing but the board forecast that asset holdings would "remain approximately unchanged in 2022', a restatement of its existing position.

The detailed rate forecast showed the policy rate starting to edge up, to 0.06%, at the start of 2024 and then to climb steadily to 0.31% by the end of the forecast period three years out.

That profile was steeper than the previous one, from November, which had the policy rate at 0.19% at the end of the forecast,. Some analysts had expected the projected timing of the first hike to be brought forward into 2023 but the changes the Riksbank has made are modest and do not represent any big overhaul of the policy approach of leaving the existing stimulus in place this calendar year.