Sweden's Central Bank Cuts Key Rate and Sees Two More Cuts This Year

By Dominic Chopping

STOCKHOLM--Sweden's central bank cut its key interest rate for the third time this year and said borrowing costs will likely be lowered again soon as a faltering economy threatens to push inflation further below its target.

The Riksbank cut its key rate to 3.25% from 3.5%, in line with a poll of economists conducted by The Wall Street Journal ahead of the decision.

"If the outlook for inflation and economic activity remains unchanged, the policy rate may also be cut at the two remaining monetary policy meetings this year," the Riksbank said.

A 50 basis points cut is possible at one of the remaining meetings this year and the central bank now forecasts one or two further rate cuts during the first half of 2025.

The Riksbank's rhetoric is in sharp contrast to policymakers at the European Central Bank who have signaled the bank will continue to take a cautious approach to easing the restraints it has placed on households and businesses, despite signs that the economy is slowing and inflation is cooling.

The eurozone's central bank lowered its key interest rate for a second time earlier this month, having first moved in June.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

September 25, 2024 04:00 ET (08:00 GMT)

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