Interest Rate in Sweden
Sweden - Interest Rate
The Riksbank delivers larger-than-expected hike in September
At its meeting on 19 September, the Riksbank delivered its largest increase in nearly 30 years: a 100 basis point raise, bringing the policy rate to 1.75%. While markets expected a hike, its size took them by surprise, as only a 75 basis point rise had been priced in. The Bank also noted that, while asset purchasing activity in H2 will be as announced in June, it will likely stop these purchases at the end of 2022.
The move was primarily driven by the Bank’s desire to rein in inflation, which has continued to accelerate rapidly and has surpassed the Bank’s previous forecasts. Growth in consumer prices with a fixed interest rate soared to 9.0% in August (July: 8.0%), the highest level in over three decades. Additionally, the Riksbank sees inflation rising further in the remaining months of the year, and it has stated that the risks of high inflation becoming entrenched are still significant. Lastly, the strong performance of the Swedish economy gave the Riksbank room to raise the rate comfortably.
With regard to forward guidance, the Riksbank’s tone was hawkish in its communiqué. The Bank noted that “the policy rate will be raised further in the coming six months”. Consequently, its policy rate forecast was raised again: The policy rate is now seen ending 2022 at 2.50%—instead of June’s 2.00% forecast for early 2023.
The next monetary policy meeting is scheduled for 23 November.
Our panelists are updating their forecasts in light of the recent decision.
Sweden - Interest Rate Data
| 2015 | 2016 | 2017 | 2018 | 2019 | |
|---|---|---|---|---|---|
| Policy Interest Rate (%) | -0.35 | -0.50 | -0.50 | -0.50 | 0.0 |
Sweden Interest Rate Chart
Source: Riksbank.
Sweden Facts
| Value | Change | Date | |
|---|---|---|---|
| Bond Yield | 0.15 | -4.79 % | Jan 01 |
| Exchange Rate | 9.36 | -0.20 % | Jan 01 |
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Economic News
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Sweden: CPIF softens in October
November 15, 2022
Consumer price inflation with a fixed interest rate decelerated to 9.3% in October, down from September’s 9.7%.
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Sweden: Industrial output bounces back in September
November 9, 2022
Industrial output expanded 3.6% month on month in seasonally adjusted terms in September, which contrasted August's 6.9% plunge.
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Sweden: Economic growth beats expectations and maintains momentum in Q3 according to advanced data
October 28, 2022
The economy fared well in the third quarter of 2022 and defied fears of a contraction.
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Sweden: Economic sentiment plunges to over two-year low in October
October 27, 2022
The economic tendency indicator (ETI) deteriorated once again in October, coming in at 84.6, down from September’s 90.8.
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Sweden: CPIF comes in at highest level since June 1991 in September
October 13, 2022
Consumer price with a fixed interest rate inflation soared to 9.7% in September, up from August’s 9.0%.
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