Sweden's Riksbank raises key interest rate to 3 percent
Sweden's central bank, the Riksbank, raised the key interest rate on Thursday by 0.5 percentage points to 3 percent, which marks the bank's highest rate in 15 years.
"Inflation is far too high and has continued to rise," the bank wrote in a press statement on Thursday morning.
"For inflation to drop and stabilise at the [2 percent] target within a reasonable amount of time, the Riksbank has decided to raise the key interest rate by 0.5 percentage points to 3.0 percent."
The rate raise puts Sweden's key interest rate at the highest level in almost 15 years.
This rate hike has not come as a shock, with economists at Handelsbanken, Nordea and Swedbank all predicting that the bank would announce a rise of 0.50 percentage points on February 9th.
The bank also warned in the press statement that rates are likely to rise further at the next announcement in April.
"The key interest rate will probably see a further raise during the spring," its statement read.
Handelsbanken and Nordea both predicted a final rise of 0.25 percentage points before there is a pause in rate increases, but their colleagues at Swedbank believe that there will be a further increase in the policy rate this summer, to 3.5 percent.
The Riksbank also announced that the bank will start selling off government bonds from April.
This is Erik Thedéen’s first interest rate announcement at the Riksbank since he took over as governor at the turn of the year.
The Riksbank was set to hold a press conference at 11am on Thursday, when Thedéen was to further discuss the rate rise.
Comments (1)
See Also
"Inflation is far too high and has continued to rise," the bank wrote in a press statement on Thursday morning.
"For inflation to drop and stabilise at the [2 percent] target within a reasonable amount of time, the Riksbank has decided to raise the key interest rate by 0.5 percentage points to 3.0 percent."
The rate raise puts Sweden's key interest rate at the highest level in almost 15 years.
This rate hike has not come as a shock, with economists at Handelsbanken, Nordea and Swedbank all predicting that the bank would announce a rise of 0.50 percentage points on February 9th.
The bank also warned in the press statement that rates are likely to rise further at the next announcement in April.
"The key interest rate will probably see a further raise during the spring," its statement read.
Handelsbanken and Nordea both predicted a final rise of 0.25 percentage points before there is a pause in rate increases, but their colleagues at Swedbank believe that there will be a further increase in the policy rate this summer, to 3.5 percent.
The Riksbank also announced that the bank will start selling off government bonds from April.
This is Erik Thedéen’s first interest rate announcement at the Riksbank since he took over as governor at the turn of the year.
The Riksbank was set to hold a press conference at 11am on Thursday, when Thedéen was to further discuss the rate rise.
Join the conversation in our comments section below. Share your own views and experience and if you have a question or suggestion for our journalists then email us at [email protected].
Please keep comments civil, constructive and on topic – and make sure to read our terms of use before getting involved.
Please log in here to leave a comment.