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Riksbank to start to shrink its balance sheet next year

After last week’s hawkish shift by the Fed, and the erasure of any doubt about the start of hikes by the Norges Bank, the Riksbank may also pencil a rate hike into its projections next Thursday (1st July). However, policy action will be centred on the balance sheet in the near term; we expect the Bank to start to shrink it sooner than other central banks, beginning before the end of next year.

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