(Finance) – The Riksbankthe Swedish central bank, has decided to cut the reference rate by 0.25 percentage points to 2.50%to provide further support to the economy and help inflation stabilize at target. The key rate has been cut by a total of 1.5 percentage points since May.
If the outlook for inflation and economic activity remains unchanged, the policy rate it could be cut once again during the first half of 2025, the meeting statement reads.
“The interest rate has been reduced rapidly and monetary policy affects the economy with a lag – it is highlighted – This suggests a more cautious approach when formulating monetary policy in the future. The Riksbank will therefore carefully assess the need for future interest rate adjustments, in light of the effect of previous cuts and changes in the risk profile regarding the outlook for inflation and economic activity.”
The perspectives for inflation and economic activity remain “uncertain“, says the Riksbank. There is particular uncertainty regarding developments abroad, for example regarding geopolitical tensions, lack of clarity regarding trade policy and government crises arising in Europe.
“There are also risks related to the recovery of the Swedish economy and the krona exchange rate“, the note reads.
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