Sweden's central bank cut its policy rate by 25 basis points to 2.25% on Wednesday, continuing the gradual easing cycle it has pursued as inflation returned close to its 2% target and the domestic economic outlook remained subdued. The Riksbank's decision was announced alongside its January 2025 Monetary Policy Update.
Swedish inflation had moved back towards the Riksbank's target after a prolonged period of elevated price growth that prompted the bank to raise rates from near-zero levels.
RATE PATH
The Riksbank has characterised its approach as gradual and data-dependent, adjusting rates mostly in quarter-point steps, though it cut by half a point in November 2024.
The January decision was accompanied by the release of the bank's Monetary Policy Update, which set out the Riksbank's assessment of domestic and external economic conditions. The report framed the current rate trajectory as consistent with bringing inflation sustainably to target while supporting a return to more robust growth, and the Executive Board said the December policy-rate forecast essentially held, while standing ready to act if the outlook changed.
FUTURE DECISIONS
The bank has said that its future decisions will be governed by incoming data on both inflation and the real economy, rather than a pre-committed timetable.
Wednesday's cut to 2.25% leaves the policy rate at its lowest level since late 2022.