Riksbank to signal end of asset purchases

As next week’s monetary policy meeting is the last before asset purchases are set to end in June, the Riksbank will probably signal whether they will be extended. While CPIF inflation, which excludes the direct effect of interest rate changes, disappointed in March at just 1.5%, that was mainly due to one-off effects because of the later timing of Easter this year. More generally, in recent months economic activity has strengthened significantly. And with the Bank set to own around 50% of all government bonds by June and market participants complaining that it is affecting the functioning of the market, we suspect that officials will judge that now is the time to stop purchases.