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17 Mar 2020
Sweden: Stay negative on the SEK – Danske Bank
The measures proposed by the Riksbank yesterday could be perceived as relatively neutral for the SEK, since it left the repo rate unchanged for now, in the opinion of analysts at Danske Bank. EUR/SEK trades at 10.934.
Key quotes
“The Riksbank is set to expand QE with up to SEK300bn in 2020. It will also offer weekly 3M liquidity operations at the repo rate plus 20bp with full allotment and the o/n lending rate is lowered from 75bp above the repo rate to 20bp above.”
“We still think it will have to cut the repo rate below zero and consider that to be a headwind for the SEK.”
“We stay negative on the SEK, seeing 10.00 in USD/SEK and 11.00 in EUR/SEK as surmountable should risk sentiment remain sour.”