Antje Praefcke at Commerzbank reports that the Riksbank raised its policy rate from 1.75% to 2.00% as expected and remains in restrictive mode, but the statement weakens the case for a December hike. She sees the key decision likely pushed to February 2027, with EUR/SEK potentially moving back above 11 if rate increases are delayed and energy prices fall.

Restrictive stance but later hike risk

“The Riksbank raised its policy rate yesterday from 1.75% to 2%, as expected. It will not publish updated forecasts until December, alongside its new Monetary Policy Report. The reason for yesterday’s rate hike is clear: Stronger economic activity combined with cost increases due to supply disruptions mean that inflation is expected to continue rising going forward.“

“Inflation continues to be dampened by special factors. According to the Riksbank, inflation would be at 3% without these temporary fiscal policy measures. Due to stronger economic activity, cost increases resulting from supply disruptions and a weaker krona this year, both inflation and underlying inflation are expected to rise above 2% next year, according to the Riksbank.”

“While the Riksbank is thus maintaining its restrictive stance, the statement now suggests that the case for a December rate hike has weakened. The focus is therefore shifting more towards February 2027, unless supply disruptions persist and increase the risk of inflation remaining too high, which could prompt the Riksbank to raise the policy rate again as early as December.”

“Should a December hike become more likely over the coming weeks, the krona could strengthen somewhat further. Conversely, signs of an end to the Iran conflict and falling energy prices would argue for postponing the next rate hike until February or potentially even later. If the latter scenario materialises, I would expect a modest correction in the SEK, with EUR/SEK moving back above 11.”