While many of the changes in the new proposed Riksbank Act are benign, the Bank argues with some merit that the new legislation would make it more difficult for it to use its balance sheet during times of crisis. All told, the changes will make the Bank more reliant on the repo rate in the future, which could make a return to negative rates more likely at some point. Next week, consumer price inflation data from May are likely to show that headline inflation slowed in both Norway and Sweden, but rose in Switzerland. Meanwhile, the Norwegian economy probably flat-lined in April, but the easing of restrictions means that May should be a lot better.
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