Swedish central bank cuts interest rates for fifth time this year
Sweden's central bank reduced interest rates to their lowest level in almost two years on Thursday and signalled that another cut could be on the cards early next year.
The Riksbank lowered its key policy rate by 25 basis points to 2.5%, in line with economists' projections, which it said would provide further support to the economy and help inflation stabilise at the target.
The cut marked the fifth round of monetary easing this year, with the policy rate having now been cut by a total of 1.5 percentage points since May.
"Despite some signs that economic activity is on its way to recovery, it remains weak. A stronger economy is important in its own right, but it is also a necessary condition for inflation to stabilise close to the target," the Riksbank said.
Consumer price inflation held steady at a three-year low of 1.6% in November, staying under the Riksbank's 2% target for the fourth month running. Price pressures have eased significantly since the start of the year, when inflation was running above the 5% mark.
Looking ahead, the Riksbank said it was looking to take a "more tentative approach" to monetary policy, given how rapidly rates have come down and taking into account the lag effect.
"The Riksbank will therefore carefully evaluate the need for future interest rate adjustments, in light of the effect of earlier cuts and shifts in the risk profile regarding the outlook for inflation and economic activity. If the outlook remains unchanged, the policy rate may be cut once again during the first half of 2025," the central bank said.