The Riksbank’s decision
Riksbank, Sweden’s central bank, recently announced a cut in interest rates by half a percentage point, bringing them to 2.75%. This move was welcomed by economists, who had planned a similar intervention. The decision was taken in a context of economic stagnation, with the objective of stimulating economic activity in the country.
Riksbank stressed that it is essential to lower the political rate faster than originally expected, to ensure a strengthening of the economy and stabilize inflation close to the 2% target.
Implications for the Swedish economy
The cut in interest rates is a strategy that aims to encourage investment and consumption, key elements for economic recovery. Riksbank has warned that inflation could remain below the target for an extended period, which raises concerns about a possible prolonged stagnation. Analysts fear that low inflation could take hold, making it harder for the central bank to achieve its economic objectives. The situation is further complicated by the performance of the Swedish krona, which has shown signs of weakness, trading around 11.64 euros, with a loss of more than 4% since the beginning of the
year.
Market reactions and future prospects
The market reaction to the Riksbank’s decision has been mixed. While European stock exchanges opened positively, with Piazza Affari up 0.7%, the performance of the Swedish krona caused concern. Investors are closely monitoring the central bank’s next moves, especially in view of further possible cuts in December and the first half of 2025. Riksbank has clarified that it will continue to assess the economic situation and make decisions based on concrete data, keeping a close eye on inflation and the trend of the global economy
.