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Sweden’s central bank raises interest rate by 100 basis points to 1.75% and beats expectations

The Central Bank of Sweden raised its benchmark interest rate by 100 basis points to 1.75% on Tuesday (20), and signaled the end of asset purchases, in a new attempt to combat soaring inflation.

The decision by the Riksbank, as the Swedish central bank is known, surprised analysts consulted by the The Wall Street Journalwhich predicted a lower interest rate hike, from 75 basis points, to 1.50%.

The Riksbank now expects its base rate to be close to 2.5% in 2023, from a previous projection of 1.9%, and to remain at that level through 2024, before decelerating to 2.4% at the end of the forecast period, in the third quarter of 2025.

“Inflation was higher than the Riksbank’s previous forecast in June and is expected to accelerate further during the year,” the Swedish central bank said in a statement.

Risksbank also said it would continue to buy bonds, in line with plans announced in June, but indicated that the acquisitions would be completed by the end of the year.

Source: CNN Brasil

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