MNI BRIEF: Riksbank Leaves Policy On Hold; Sees It Flatlining
MNI (LONDON) - The Riksbank left its policy rate on hold at 2.25% Thursday and predicted that it would now flatline throughout its three year forecast.
The RIksbank, having cut rapidly, is now signalling that rates have troughed and a prolonged period of stability will follow, although it acknowledged substantial risks on either side. The forecasts showed the policy rate still around its crurrent rate in the first quater of 2028.
On the upside, the Executive Board said it would watch for signs that the rise in headline inflation early in 2025 could be contagious and that inflation would not fall back to target as expected while the krona, which has outperformed so far this year, was seen as a two-edged risk as hard-to-predict future movememts could lead to higher or lower than expected inflation. The target inflation measure, CPIF, was forecast to fall from 2.5% in 2025 to 1.9% in 2026 with GDP rising from 1.9% this year to 2.4% next, with the latter lowered from 2.6% in the previous forecast.