Sweden’s Riksbank holds policy rate at 3.75%

The Swedish Krona weakened against the Euro on Thursday, after Riksbank left its benchmark policy rate without change at 3.75% at its June meeting, in line with market consensus.

The decision came after in May Riksbank had delivered the first rate cut since 2016.

The central bank noted that inflation was approaching the 2% objective, while long-term inflation expectations remained stable.

Although core inflation has eased to 3%, recent outcomes were slightly higher than anticipated, implying a need for cautious rate cuts, Riksbank said.

Still, in case inflation prospects do not change, the policy rate could be reduced two or three times in the second half of 2024, the central bank said.

The Swedish Krona was 0.44% weaker on the day against the Euro, with the EUR/SEK currency pair last trading at 11.3325.

The exotic Forex pair advanced to 11.3437, a fresh 2 1/2-week high, immediately after the policy announcement.