The Swedish central bank announced on Thursday that it will keep its policy rate unchanged at 2.25 percent, citing balanced monetary conditions despite increased global uncertainty, reported Xinhua.
The Riksbank said that it is "wise to await further information to obtain a clearer picture of the outlook," emphasizing that Swedish monetary policy remains well-calibrated for current conditions.
While acknowledging that "increased uncertainty abroad implies that the economic outlook appears to be slightly weaker than in the March forecast," the central bank said the effects on inflation are harder to predict.
However, it concluded that it is "somewhat more probable that inflation will be lower rather than higher" compared to earlier projections. This assessment, the Riksbank noted, could open the door to a potential easing of monetary policy in the near future.
Thursday's rate decision is the first since the United States raised tariffs on global imports in April — a move that has generated significant uncertainty in the international economy.
"The U.S. administration's various moves in trade and security policy have fallen like a wet blanket over the global economy, including Sweden's," said Riksbank Governor Erik Thedeen during a press conference on Thursday. He noted that the heightened uncertainty complicates economic assessments and suggests a more pessimistic outlook for Sweden than previously anticipated.
Economic commentator Alexander Noren from Swedish Television said the announcement came as no surprise. "All central banks are now treading cautiously, as the economic situation is uncertain," he said. Noren added that further rate cuts are likely, as the bank expects inflation to continue declining.
The Riksbank has progressively lowered the policy rate from a peak of 4 percent in early 2024 to the current 2.25 percent in response to changing economic conditions.
Source: www.dailyfinland.fi
