* Balance sheet to remain unchanged this year
* First rate hike plan brought marginally forward
* Inflation pressure seen moderating
* Swedish crown weaker against euro
STOCKHOLM, Feb 10 (Reuters) - A divided central bank in Sweden kept policy plans broadly unchanged on Thursday, stressing that surging inflation is temporary and it is too early to begin withdrawing support from the economy even as the effects of the COVID-19 pandemic fade.
The Riksbank's cautious approach is out of step with many central banks around the world which are speeding up the exit from ultra-loose policy geared toward the pandemic.
Inflation hit 4.1% in Sweden in December and the economy has already recovered all the ground lost during the pandemic.
That led three rate-setters to advocate smaller overall bond purchases - part of a package of COVID support measures - and faster tapering this year, giving a 3-3 tie on policy, only broken by Governor Stefan Ingves' casting vote.
His view tipped the scales in favour of sticking to existing policy plans.
"The Executive Board's forecast is that the asset holdings will remain approximately unchanged in 2022 and then decrease gradually," the central bank said in a statement.
"The forecast for the repo rate indicates that it will be raised in the second half of 2024, which is slightly earlier than in the assessment in November."
Last week, the Bank of England raised interest rates to 0.5% with further hikes to come while the European Central Bank (ECB) opened the door for a hike as early as this year amid mounting inflation risks.
The United States Federal Reserve is expected to start hiking in March.
The Riksbank's statement - which reflects the winning view on developments - pointed to differences in the inflation outlook in Sweden compared to many other countries.
It stressed that underlying price pressures at home are in line with the 2% target and that the effects of higher energy prices are expected to fade.
"Inflation prospects have now partly changed," the central bank said. "But even if the risk of too low inflation is assessed to have declined, it still remains."
The Swedish crown eased against the euro after the decision, but markets were still pricing in rate hikes well ahead of the Riksbank's current forecast.
"We think core inflation will be higher than the Riksbank's forecast during 2022. We also expect the ECB to hike rates this year, increasing pressures on the Riksbank to take action as well," Nordea economist Torbjorn Isaksson said in a note.
"Thus, a rate hike can't be ruled out despite the bank’s rather dovish stance today."
(Reporting by Stockholm Newsroom; Editing by Niklas Pollard and Toby Chopra)
