Riksbank likely to leave repo rate unchanged in October

The Riksbank is likely to announce an extension of its government bond purchase programme at its October meeting. The extension will cover Q1 2016, with the amount rising by SEK 35bn. The purchase programme will thus total SEK 170bn.

"The Riksbank's repo rate is now seen bottoming at -0.45%. The repo rate will be left unchanged in October but lowered by 10 bp in December to -0.45%", says Nordea Bank.

The uncertainty regarding the monetary policy outlook should be underlined.

"Thus, the Riksbank will not launch any additional stimulus measures next year. The repo rate will be hiked at end-2016 to 0.0% and remain at that level throughout 2017", added Nordea Bank.