Current:Home > NewsSweden’s central bank hikes key interest rate, saying inflation is still too high-DB Wealth Institute B2 Expert Reviews
Sweden’s central bank hikes key interest rate, saying inflation is still too high
View Date:2024-12-23 20:20:22
STOCKHOLM (AP) — Sweden’s central bank raised its key interest rate Thursday, saying that “inflationary pressures in the Swedish economy are still too high,” although there were signs that inflation had begun to fall.
The Riksbank raised its policy rate by a quarter of a percentage point to 4% and said its forecast indicated that it could be raised further.
”Inflation is also falling in Sweden. The rate of increase in energy and food prices has slowed significantly, which is positive,” the Riksbank said in a statement.
But the bank added that “inflation pressures are still too high,” noting that service prices are still rising rapidly and Sweden’s currency, the krona, is “unjustifiably weak.”
The Swedish currency has plunged to its lowest level ever against the euro and the U.S. dollar. Sweden has been struggling with high inflation — it was 7.5% in August, down from 9.3% in July, but far from the 2% target set by Sweden’s central bank.
“To ensure that inflation continues downwards and stabilizes around the target within a reasonable period of time, monetary policy needs to be tightened further,” the bank said.
Thursday’s interest rate increase meant that the policy rate is at the highest level since October 2008, the Swedish news agency TT wrote.
Central banks worldwide have been hiking borrowing costs to fight inflation sparked by the rebound from the COVID-19 pandemic and then Russia’s war in Ukraine, which pushed up food and energy prices.
Norway’s central bank also raised its policy rate by a quarter-point on Thursday, to 4.25%. Norges Bank Gov. Ida Wolden Bache said there “likely” will be an additional hike and “most probably in December.”
Inflation in Norway — which hit 4.8% in August — is above the central bank’s 2% target.
“Persistently high inflation imposes substantial costs on society,” Norges Bank said, adding that ”a somewhat higher interest rate is needed to bring inflation down to target within a reasonable horizon.”
The moves came on a busy day of central bank action. The Swiss National Bank kept rates steady Thursday, while financial markets were split over whether the Bank of England would impose another hike or hit pause.
A day earlier, the U.S. Federal Reserve left its benchmark interest rate unchanged for the second time in its past three meetings, a sign that it’s moderating its fight against inflation as price pressures have eased.
veryGood! (84)
Related
- Dwayne Johnson Admits to Peeing in Bottles on Set After Behavior Controversy
- 122 fishermen rescued after getting stranded on Minnesota ice floe, officials say
- Climate activists from Extinction Rebellion target bank and block part of highway around Amsterdam
- On her 18th birthday, North Carolina woman won $250,000 on her first ever scratch-off
- Burt Bacharach, composer of classic songs, will have papers donated to Library of Congress
- Pakistan election officials reject former prime minister Khan’s candidacy in parliamentary election
- UN chief closes tribunal founded to investigate 2005 assassination of former Lebanese prime minister
- Biden fast-tracks work authorization for migrants who cross legally
- 'Joker 2' actor pans DC sequel as the 'worst film' ever: 'It has no plot'
- The Empire State rings in the new year with a pay bump for minimum-wage workers
Ranking
- J.Crew Outlet Quietly Drops Their Black Friday Deals - Save Up to 70% off Everything, Styles Start at $12
- Zac Brown, Kelly Yazdi to divorce after marrying earlier this year: 'Wish each other the best'
- Lamar Jackson’s perfect day clinches top seed in AFC for Ravens, fuels rout of Dolphins
- UN chief closes tribunal founded to investigate 2005 assassination of former Lebanese prime minister
- Volunteer firefighter accused of setting brush fire on Long Island
- Russia carries out what Ukraine calls most massive aerial attack of the war
- AP PHOTOS: Dancing with the bears lives on as a unique custom in Romania
- This group has an idea to help save the planet: Everyone should go vegan
Recommendation
-
Why Dolly Parton Is a Fan of Taylor Swift and Travis Kelce's Little Love Affair
-
Most funding for endangered species only benefits a few creatures. Thousands of others are left in limbo
-
Your New Year's Eve TV Guide 2024: How to Watch 'Rockin Eve,' 'Nashville's Big Bash,' more
-
Paula Abdul accuses former American Idol executive producer Nigel Lythgoe of sexual assault in new lawsuit
-
Martin Scorsese on faith in filmmaking, ‘The Saints’ and what his next movie might be
-
China calls Taiwan presidential frontrunner ‘destroyer of peace’
-
Michigan giving 'big middle finger' to its critics with College Football Playoff run
-
Russia launches fresh drone strikes on Ukraine after promising retaliation for Belgorod attack