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Thursday, February 20, 2025

Sweden central bank reduces key rate

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STOCKHOLM—Sweden’s central bank said Wednesday it was cutting its key interest rate again by a quarter point to 2.25 percent as inflation eases.

The Riksbank made its first rate cut in eight years in May, after a series of rate hikes aimed at reining in inflation.

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Sweden’s interest rate had been held at four percent since September 2023.

“Given that the risk of inflation becoming too high is limited, at the same time as economic activity is weak, the executive board assesses that it is appropriate to cut the policy rate now,” the central bank said in a statement.

Swedish inflation fell to 0.8 percent year-on-year in December, according to Statistics Sweden.

The inflation measure used by the Riksbank to guide monetary policy, CPIF, which is adjusted for interest rates, came in at 1.5 percent in December, still below the central bank’s two-percent target. AFP

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