A citizen visits a supermarket in Stockholm, Sweden, on Jan. 16, 2024. (Xinhua/Fu Yiming)
The policy rate may be lowered sooner than indicated in November, possibly during the first half of the year, the Riksbank said.
STOCKHOLM, Feb. 1 (Xinhua) -- Sweden's central bank, the Riksbank, decided on Thursday to keep its benchmark interest rate (policy rate) unchanged at 4 percent, but said it is likely to be lowered sooner than previously expected.
The decision was based on statistics showing a continuous slowdown of inflation in November and December, but the monetary policy has to remain contractionary to stabilize inflation around the targeted 2 percent, the Riksbank said in a press release.
The Swedish economy has slowed down and wages have increased moderately, indicating that inflation is likely to fall further, the Riksbank said.
This photo taken on Sept. 27, 2022 shows the logo of Sweden's central bank Riksbank in Stockholm, Sweden. (Xinhua/Fu Yiming)
The policy rate may, therefore, be lowered sooner than indicated in November, possibly during the first half of the year, it added.
However, Riksbank's executive board stressed that there are uncertainties and that inflation could pick up again, pointing to risks of supply shocks resulting from the geopolitical unease, corporate pricing behaviours yet to be normalized and a substantial weakening of the Swedish currency krona.
The current policy rate is the highest since 2008. Before the Riksbank started raising its policy rate in May 2022, it had remained at or below zero for over seven years.
Swedish krona notes and U.S. dollar notes are pictured in Stockholm, Sweden, Sept. 22, 2022. (Xinhua/Fu Yiming)■
