Riksbank Governor Erik Thedeen said on Sunday, “The Swedish central bank might have underestimated inflationary pressure and will likely have to stick to its forecasts of another interest rate hike in April,” per Reuters.

“It could be that the inflation process is worse than we thought,” Riksbank Governor told SVT television.

Additional comments

The main scenario remained a hike of 25 or 50 basis points in April and added that inflation outcomes since the monetary policy decision in February had been worse than expected.

It is in our forecasts that inflation will come down quite quickly. The problem is that it has been in our forecasts all through 2022 and it has yet to happen.

Market implications

The news can weigh on the USD/KRW price that grinds higher of late around 1,296 during early Monday. It’s worth noting that the Riksbank will announce its next monetary policy decision on April 26.