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* Minutes seen as dovish
* Focus shifted away from household debt to inflation
By Simon Johnson and Johan Ahlander
STOCKHOLM, July 16 sThe majority of Swedish rate-setters are firmly focused on weak inflation, leaving room for another rate cut if prices fail to rise as expected, minutes of the most recent policy meeting showed on Wednesday.
The Swedish economy bounced back quicker than the rest of Europe after the financial crisis, but sluggish demand abroad and a strengthening currency have held back growth, and prices have stood still for much of the last year.
In support of the 50-basis-point cut agreed by the bank earlier this month, Deputy Governor Per Jansson said it was "urgent that the Riksbank should give clear signals that rising inflation is now its top priority".
After the cut, the repo rate is now back at levels not seen since the crisis of 2009, despite worries that cheaper borrowing costs will encourage households to take on more debt and fuel an already overheated housing market.
While repeating that debt levels - among the highest in Europe at about 175 percent of disposable income - are a threat to economic stability, the rate-setters indicated they could countenance even lower rates should inflation continue to undershoot.
Despite voting against the 50-basis-point cut in favour of a smaller 25 percent easing, Governor Stefan Ingves did not rule out lower rates.
"If it were the case that monetary policy needed to be even more expansionary, the Executive Board of the Riksbank may decide to cut the repo rate down to the zero lower bound," Ingves said.
Olle Holmgren, analyst at SEB said the minutes were more dovish than expected.
"There were comments from Ingves where he suggests that it is likely that Sweden will raise later than the U.S. and the UK, and they suggest that the interest rate can be lowered again if inflation surprises on the downside," he said. "Especially Ingves was perhaps a bit more dovish than expected."
Cutting the repo rate by half a percentage point this month to 0.25 percent, the Riksbank pushed back its forecast for when rates will start to rise and said there was a slightly higher likelihood its next move would be a cut than that it would be a hike.
Short-term inflation figures will determine whether rates are cut again, but further easing by the European Central Bank or Norway's central bank - which would lead to a strengthening of the Swedish crown and put further downward pressure on inflation - will also play a key role.
The ECB has cut interest rates to record lows and Norway's central bank has pushed back rate hikes and left the door open for a rate cut.,
Both Governor Stefan Ingves and First Deputy Governor Kerstin af Jochnick wanted a 25 basis point rate cut. (Reporting by Stockholm Newsroom; Editing by Larry King)