The policy rate is left unchanged

Published 27 March 2024 at 11.30

Economics. Inflation is about to stabilize at the target, but inflationary pressure is still somewhat elevated. That is the view of the Riksbank, which today has therefore decided to leave the key interest rate unchanged at 4 percent.

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The Riksbank points out that inflation has continued to fall and indicators indicate that it is approaching 2 percent.

“In light of the very high inflation of recent years and changed pricing behavior of the companies, the executive board wants further confirmation that inflation is stabilizing close to the target. The risk of inflation taking hold at excessively high levels continues to decrease, but inflationary pressure is still somewhat elevated. The Executive Board has therefore decided to leave the key interest rate unchanged at 4 percent,” writes the authority.

If the inflation outlook continues to be favorable, the key interest rate can probably be lowered in May or June, according to the Riksbank.

However, the management emphasizes that there are risks that could cause inflationary pressure to rise again. These include new supply disruptions as a result of the geopolitical unrest, that the krona continues to weaken or that companies' pricing behavior does not normalize as expected.

“The adjustment of monetary policy going forward should therefore be characterized by caution, with gradual reductions in the key interest rate. New information and how it is judged to affect the economic and inflation outlook is decisive for how monetary policy will be designed.”