The Riksbank has decided to increase the interest rate by 0.25% today and states that it is probable that it will raise them further in the future. The bank already forecasts the rate to be 4.25% in the first half of 2008. The entity cites increased cost pressures.
Sweden repo rate at 4%
Sweden sees its economy still going strong, however, it can not ignore the slowdown and financial turbulence that is being faced by the gigantic U.S. and European economies. The bank continues its plan of curbing inflation by raising rates as the aforementioned economies would have done had it not been for the troubled financial markets. The rising oil and food prices is an ongoing concern as well as the tightening labor market. Therefore, Sweden will undoubtedly keep a close eye on international markets.
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