The Swedish central bank, Riksbank, extended its bond buying program again in December as a reaction to the recent mixed bag of inflation data. Moreover, apart from the securities bought by the end of 2016, in an amount of SEK 245 billion, it would purchase another SEK 30 billion in bonds by mid-2017.
Furthermore, the Swedish central bank had already announced in October that the interest rates would stay low until early 2018, which is six months longer than assumed as recently as September, noted Commerzbank. Also, the Riksbank highlight that an overly quick appreciation of the SEK is still considered undesirable. This would make it quite difficult for inflation to return to the Riksbank’s target.
“Not least for this reason will the policymakers be ready to take new measures in the coming year, should the inflation outlook be at risk again”, added Commerzbank.
