Sweden’s central bank raised interest rates by 100 basis points (one full percentage point),
bringing its benchmark policy rate to 1.75%.
In announcing the rate hike, Sweden’s Riksbank said that “inflation is too high” in the
Scandinavian nation of 10 million people.
The Riksbank said that interest rates in Sweden will need to rise further in coming months to
bring inflation back to its 2% target.
Sweden’s inflation rate rose to 9% year-over-year in August, its highest level since 1991.
The Covid-19 pandemic and soaring energy prices due to Russia’s invasion of Ukraine have
driven consumer prices higher in Sweden. However, the Riksbank said strong domestic
economic activity has also contributed to inflation.
The big rate hike in Sweden comes days before the U.S. Federal Reserve is expected to raise
interest rates a further 75 basis points to combat inflation.
