Financial News: Sweden Keeps Interest Rate Steady; Eyes Rate Hikes

Sweden Keeps Interest Rate Steady; Eyes Rate Hikes Amid Inflation Risks

08/20/2026 - 06:03:00 (RTTNews)

(RTTNews) - Sweden's central bank left its interest rate unchanged on Thursday and repeated the need for rate hike if high inflation last longer.

The Riksbank decided to leave the policy rate unchanged at 1.75 percent and assessed that the probability of a rate increase later this year remains, the bank said in a statement.

"If the unexpectedly high inflation during the summer were to be the start of a larger and more lasting upturn in inflation, the Riksbank would adjust its monetary policy in a tighter direction," the bank said.

Policymakers observed that both growth and inflation remained higher than forecast in June and there is still a risk of underlying inflation becoming too high in the wake of the supply shocks in the Middle East.

However, the picture is not clear-cut as companies' pricing plans remained subdued, disruptions in global supply chains declined and the labor market has been somewhat weaker than expected, the bank noted.

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