The monetary policy announcement from Sweden's central bank AKA Riksbanken yesterday morning was completely in line with the market's expectations, the policy rate was left unchanged. To soften the blow, Riksbanken "promised" to lower the policy rate 2-3 times later this year. A promise as set in stone as the meteorologist's weather report for next week.
The risk of lowering the policy rate just before the summer is that the Swedish krona is likely to lose further value against the EUR and USD, causing Riksbanken to take the cowardly way out to avoid criticism when the Swede's holiday abroad become significantly more expensive.
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