MNI BRIEF: Riksbank Open To Further Tightening - Minutes

The Riksbank recognizes further tightening could well be needed, according to the minutes of the September monetary policy meeting, even as the key policy was hiked 25 basis points to 4.0%.

The September rate path only partially priced in another 25 bps hike this year, with a 4.1% peak, but various board members highlighted upside inflation risks, the persistence of core inflation and concerns over krona weakness. First Deputy Governor Anna Breman said that inflation was more likely to come in higher than lower than the Riksbank forecast, while Deputy Governor Per Jansson said that he continued "to see certain risks that we may need to revise the (rate) plan further in a tighter direction going forward."

Deputy Governor Martin Floden said that September's hike should help slow the krona's depreciation, leaving open the question of what happens if it does not. Governor Erik Thedeen said he could "envisage further tightening being necessary so that we can be reasonably sure that inflation will continue down to our target of 2%."