The Riksbank delivered in April and has shifted towards a more restrictive monetary policy. Krona was only able to benefit briefly though. Economists at Commerzbank expect the EUR/SEK to move sideways for the moment.

Riksbank is actively trying to prevent a wage-price spiral

“Riksbank raised the key interest rate to 0.25% and expects two or three more steps this year. Moreover, it will start reducing its asset holdings already from the middle of the year.”

“With its interest rate hikes, the Riksbank intends to counteract the high inflation becoming entrenched in price-setting and wage-formation, and ensure that inflation returns to the target after some time. The Riksbank is thus actively trying to prevent a wage-price spiral.”

“The Riksbank still expects solid growth. However, following the rapid recovery after the pandemic, it now expects growth to be somewhat slower. The Riksbank has therefore lowered its forecasts.”

“I expect EUR/SEK to move sidewards, for now, a development that will be mainly affected by further developments in the Ukraine conflict and thus risk aversion.”