Riksbank will have to raise its rate path significantly to lift the SEK – Commerzbank

The Riksbank is set to expected to announce a 75 basis points rate hike on Tuesday. In order to provide support for the krona, the krona will have to increase its rate path, economists at Commerbznka report.

A 100 bps move is not completely ruled out

“A rate step by 75 bps to 1.50% has been priced in, so Riksbank will have to raise its rate path significantly to sound restrictive and to provide upside potential to SEK short-term.” 

“I don't want to completely rule out a 100 bps move, but I am skeptical. In this case, however, the krona would see a significant push to the upside.”

See – Riksbank Preview: Forecasts from six major banks, risks of a 100 bps hike are back on the table