The Riksbank said in a statement that the current policy rate of 1.75 percent gave it a good position for adjusting it in the future if necessary.
It warned that the risk had increased that the war in Iran would lead to higher inflation, but added that Swedish inflation remains below its two-percent target, with recent inflation figures even being lower than the Riksbank's forecast.
"In addition, economic activity is weak. This means that there is scope to wait until there is a clearer picture of the effects of the war and the supply shocks it entails," it said.
Wide range of potential outcomes
It warned, however, that it could be forced to raise the policy rate in the future.
"There is considerable uncertainty and the developments call for vigilance. If the war were assessed to have large effects on the global economy and lead to a broad and persistent upturn in inflation, the Riksbank would need to raise the policy rate," it said.
"At the same time, economic activity has been weaker than expected and domestic inflationary pressures are currently low. In addition to the war in the Middle East, there are also several other risks that could affect the outlook for inflation and economic activity.
"The range of potential outcomes for what can happen going forward is wide and the Riksbank is monitoring developments closely."
What is a policy rate?
The policy rate is the bank's main monetary policy tool. It decides which rates Swedish banks can deposit in and borrow money from the Riksbank, which in turn affects the banks’ own interest rates on savings, loans and mortgages.
If bank interest rates are high, it’s expensive to borrow money, which means people spend less and as a result inflation drops.
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