Sweden raises interest rates by half a point, the biggest rise in 22 years

COPENHAGEN, June 30 (EFE) – Sweden’s central bank (Riksbanken) raised key interest rates this Thursday by half a percentage point to 0.75% to tackle inflation, its highest rise in 22 years.

“Many economies recovered quickly last year, but the imbalances that occurred when demand grew faster than supply were boosted by Russia’s invasion of Ukraine and new restrictions against the epidemic in China. This has driven up energy, commodity and food prices,” a statement read. .

Expectations are that inflation will remain above 7% in Sweden for the rest of the year, hence Riksbank sees it necessary to use monetary policy to bring inflation back to the initial target and believes rates will be close to 2% in early 2023.

The bank warns that “the Riksbank will always adjust its policy to the development of the economy and is ready to raise interest rates faster if necessary.”

The bank’s executive management also decided that from the second half of the year, the asset reduction should be accelerated at a rate higher than initially planned.

The Riksbank had already raised interest rates to 0.25% last April due to inflation, while the first increase in two years and the first time since 2014 was positive. EFE

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