Sveriges Riksbank cut its policy interest rate by 25 basis points to 3.75% on 8 May 2024, delivering the first reduction in Swedish borrowing costs since 2016 and placing the Riksbank ahead of both the European Central Bank and the Bank of England, and following the Swiss National Bank, which had cut in March 2024.
Sweden's CPIF inflation, the Riksbank's preferred measure which holds mortgage interest rates constant, was 2.2% in March, the latest reading at the time of the decision, close to the central bank's 2% target.
GUIDANCE ON FURTHER CUTS
The Riksbank said that, if the inflation outlook still holds, the policy rate is expected to be cut two more times during the second half of the year, in line with its March forecast. With CPIF inflation at 2.2%, close to the 2% target, the Executive Board said the main upside risks to inflation were linked to the strong US economy, geopolitical tension and the krona exchange rate, and that further easing should therefore be characterised by caution, with gradual cuts.