FX.co ★ Swedish Riksbank Holds Rate at 2%

The Swedish Riksbank decided to maintain its policy rate at 2% as of August 2025, aligning with market predictions. This decision comes amidst an unexpected rise in inflation, deemed temporary by the bank, while economic performance remains lackluster. Recent data illustrates inflation slightly surpassing the target; however, this increase appears to be fueled by transient factors, with several indicators suggesting a reversion toward the 2% mark. Economic growth continues to be modest, household spending remains hesitant, and the job market shows minimal progress. On the international front, uncertainties linger, exacerbated by geopolitical tensions and ongoing trade discussions with the U.S., which introduce additional risks. Nonetheless, there are some encouraging signs such as increasing real wages, previous rate reductions, and an upswing in business confidence, suggesting potential for recovery, although at a slow pace. In light of these factors, the central bank opted to maintain the current rate, supporting the June analysis that the outlook remains largely stable, while leaving room for a potential rate cut later in the year should inflation decrease and economic frailty continue.