STOCKHOLM (dpa-AFX) - Sweden's central bank maintained its policy rate on Wednesday as inflation overshot the target and the economy logged somewhat weaker than expected growth.
The executive board of the Riksbank decided to hold the policy rate at 2.00 percent as expected. But it still sees some probability of a further interest rate cut this year.
The bank has reduced the rate by 175 basis points since it started policy easing in May 2024.
Inflation climbed more than expected over the summer and remained somewhat above the target. However, the increase was assessed to be due to temporary factors.
Accordingly, inflation is forecast to fall back to 2 percent going forward.
Although economic activity remained weak, there are favorable conditions for stronger economic activity, partly due to past monetary policy easing and to rising real wages for households.
Inflation and economic activity during the summer deviated somewhat from the forecast in June but the board assessed that the outlook remains largely the same.
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