ALB Limited 26.11.2020
Sweden Riksbank expands asset purchase
The Riksbank was more aggressive on its asset buying program than expected. So, an immediate weakness was seen on the Swedish Krona. By far the best performing currency against USD year to date in all G10, USDSEK pair is still trading below the May’18 lows. It plans to extend stimulus from June until December 2021 by adding 200 billion krona in asset purchases to its current 500 billion krona.The Riksbank kept its projection for interest rates unchanged at zero through 2023. But the central bank flagged in the accompanying monetary policy report that a stronger exchange rate is one of several factors that could bring negative rates back on the table. Sweden’s economy is then seen rebounding from the second quarter of 2021 so that it reaches its pre-pandemic level at the end of the year, in line with market’s view.
