MNI BRIEF: Riskbank Hikes 25bps And Signals One More To Come

The Riksbank hiked 25 basis points Thursday, raising the policy rate to 3.75% from 3.5% and said it expected to do at least one more 25 basis point hike this year.

The central bank said also increased the planned pace of government bond sales to SEK5 billion per month from SEK 3.5 billion from September. The policy measures were in line with expectations for the central bank to raise the policy rate 25 bps while delivering something more than just a standalone hike, with the board opting for accelerated asset sales and the projected quarterly rate peak was raised to 4.05% from 3.65% in the Monetary Policy Report.

The Riksbank foresaw inflation holding above target through until the final year of its three year forecast. The forecasts for the target CPIF measure were left almost unchanged, with CPIF predicted to be 5.9% this year, 2.4% in 2024 and 1.8% in 2025.

With inflation dipping below target in 2025 the Riksbank's rate projections showed a glacial move lower in the policy rate from its peak of just over 4%, with the rate dropping back to 3.75% by Q2 2026.