The Swedish krona is expected to remain weak for now but has potential for a recovery in the medium term, according to the latest research report from Commerzbank.
Rather than “towards the end of the year” (as it had said in its July statement) Riksbank is now planning its first rate hike in December or February – i.e. later on average. In itself that would not make much of a difference, but any postponement also means that there might be a perpetual postponing and that markets might not get to see a Riksbank rate hike until the hell is freezing over.
Riksbank’s difficulties are two-fold: on the one hand the relevant inflation rate looks quite decent at just above 2 percent, but the core rate remains at a meagre 0.8 percent. On the other hand the overheating property market constitutes an obstacle that prevents monetary policy from turning “restrictive” too quickly, the report added.


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