Sweden's Riksbank has held its policy rate at 1.75%, keeping monetary policy on hold at the May 2026 meeting of its Executive Board. The decision was taken on 6 May 2026 and takes effect from 13 May, according to information published in the bank's monetary policy report.
The Executive Board said inflation was low but flagged a growing risk of higher inflation, an assessment that framed its decision to leave the policy rate unchanged rather than resume cuts. Sweden's growth was weak at the start of the year, with the Riksbank pointing to favourable conditions for stronger activity ahead.
INFLATION RISKS TILT UP
The Riksbank's characterisation of inflation risks as tilted to the upside marks a shift in the tone of its communication. While headline inflation remains low, the Executive Board judges that the balance of risks now points to the possibility of higher inflation, warranting a more cautious stance on rates.
Keeping the policy rate at 1.75% preserves the outcome of the earlier easing that the Riksbank had delivered, without adding further stimulus at a time when the Executive Board is watching for upside pressures on prices. The bank's monetary policy report on its website contains the accompanying analysis and projections underpinning the decision.
The May decision continues the Riksbank's data-dependent approach, in which projections and risk assessments are used to calibrate the policy path in response to incoming information. The May stance provides a clear signal that the bank is prepared to hold rates while the risk picture crystallises.
By moving to a hold on 6 May with effect from 13 May, the Executive Board has taken care to preserve optionality on both sides of the reaction function. The published monetary policy report frames the decision as a balanced response to a mix of low current inflation and rising upside risks, without committing to a specific direction for the next move.
GROWTH OUTLOOK
The Executive Board acknowledged that Swedish growth was weak at the start of the year, reflecting a soft patch in activity in the first months of 2026. Despite that weak starting point, the board pointed to favourable conditions for stronger activity ahead, suggesting a rebound is expected as monetary and financial conditions support demand.
The combination of low inflation, upside inflation risks and expectations of firmer growth places the Riksbank in a position where holding the current stance appears the most balanced course. Additional easing would risk feeding into the emerging upside inflation risks, while a hike would run counter to the low current inflation readings and weak recent activity.
The policy rate at 1.75% takes effect from 13 May 2026, giving Swedish banks and borrowers a clear reference for pricing over the coming period. The Executive Board will reconvene at its next scheduled monetary policy meeting to reassess the outlook based on incoming data.
The Riksbank's monetary policy report on its website details the analysis and projections behind the 6 May decision, providing the market with the assumptions underpinning the balanced assessment of low current inflation, upside inflation risks and expected recovery in activity. The policy rate at 1.75% will remain in effect from 13 May until the Executive Board revisits the stance at its next scheduled meeting.