FX.co ★ Riksbank Holds Policy Rate and Signals Prolonged Pause

The Sveriges Riksbank has opted to maintain its policy rate at 1.75% for the third consecutive meeting, during its inaugural policy decision of 2026. This decision aligns with market expectations. The central bank has signaled that this rate is expected to persist for an extended period as it evaluates the effects of its current monetary policy, which is designed to bolster economic activity and aid in stabilizing inflation around its target in the long term. Nonetheless, policymakers have cautioned that there is growing uncertainty regarding inflation and economic growth, influenced by geopolitical tensions and changes in U.S. trade and foreign policy. Although Sweden’s economy has demonstrated resilience in the face of increased tariffs thus far, there is potential for a rapid decline in consumer and business confidence. The Riksbank also pointed out the influence of the Swedish krona on inflation and identified the impact of more expansionary fiscal policies, both domestically and internationally, as significant risks to consider moving forward.