Riksbank signals steeper rate path than June forecast
Sweden's central bank has held its policy rate at 1.75% since cutting it a year ago, and economists had expected it to stay there this week.
Published
The rate has stood at 1.75% since 23 September 2025, when the Riksbank cut it by 25 basis points in a move that defied market expectations for a hold, according to Trading Economics. Ahead of this week's decision, Commerzbank analyst Antje Praefcke had expected the bank to leave the rate unchanged while keeping a possible hike by year end on the table, FXStreet reported. Analysts at ING, SEB and Nordea also expected a hold in September, with previews split on whether the next hike would land in November or later, according to Newsquawk.
The case for caution rests on weak price data. Swedish inflation ran at 0.3% year on year in August, with core inflation at 0.7%, though Praefcke noted price pressure is projected to build again as temporary tax cuts expire and energy prices stay high, FXStreet reported.
The shift pushes the signal further hawkish than markets had already priced, since a hike, not a cut, was seen as the likely next move from the current 1.75% rate. A steeper path than the June projection tends to lift Swedish short-term rates and the krona and adds modest downside for SEK-denominated bonds, but with a hike already the consensus view, the change looks incremental rather than a reversal, keeping the overall stance closer to neutral than a genuine hawkish surprise.