Sweden’s central bank raises interest rates to beat inflation
STOCKHOLM (AP) – On Thursday, the Central Bank of Sweden raised a key interest rate from zero to 0.25%, referring to the highest inflation level since the 1990s.
The Riksbank said that there had been “unusually large fluctuations in inflation in Sweden” and that the increase last year “was largely due to rapid increases in energy prices”. The consumer price index for March was 6.1%.
Since the turn of the year, inflation excluding energy has also risen rapidly and has been significantly higher than the Riksbank’s forecast in February, the central bank said in a statement. The outcome indicates that the rise is now broad and commodity prices. and food as well as service are increasing unusually fast. ”
The central bank said that the interest rate will rise gradually in the future and that it will be slightly below 2% in three years. Thursday’s decision applies from Wednesday.
Sweden is part of the European Union but does not use the euro, so it is not part of the European Central Bank.
The Frankfurt, Germany-based bank that monetary policy for the 19 countries using the euro has not raised interest rates yet and says it will do so “some time after” ending its pandemic stimulus efforts later this year.
The euro area saw inflation rise at an annual rate of 7.4% last month, the highest since statistics began in 1997.
Some other central banks in Europe, the Bank of England and the US Federal Reserve have raised interest rates as inflation soars around the world, driven by strong demand for the depths of the covid-19 pandemic and exacerbated by Russia’s war in Ukraine.