FX.co ★ Riksbank Holds Rate, Signals Possible Easing Ahead

In May 2025, the Swedish Riksbank decided to maintain its policy rate at 2.25%, a decision that aligns with market expectations. This move comes amidst growing global uncertainties, particularly after recent changes in US trade policy. These changes have led to increased market volatility and weaker growth forecasts for both the US and European economies. As a result, Sweden's economic outlook has slightly dimmed compared to March, with declining household confidence and initial signs of rising pessimism among businesses. April's inflation was reported at 2.3% for CPIF and 3.1% when excluding energy, levels that, while somewhat elevated, the Riksbank still considers temporary. Despite persistent inflation risks, especially those arising from supply chain issues or protectionist measures, the Executive Board anticipates that inflation is more likely to dip below the March forecast. Given these uncertainties, the Board believes the current monetary policy is appropriately balanced and emphasizes the importance of waiting for more data before introducing any changes, although a future rate cut remains a potential option.