Sweden’s central bank raises interest rates by 50 basis points

The Riksbank (Swedish Central Bank) increased the policy rate from 3 percent to 3.50 percent.

On the other hand, two Riksbank officials opposed the bank’s move to raise the interest rate to 3.5 and supported a smaller step by a quarter point.

The extent of the rate hike was largely anticipated by economists after price increases exceeded their forecasts.

The majority of the board, led by President Erik Thedeen, expects another quarter-point increase in interest rates in June or September.

Riksbank said in a statement, “The clear drop in inflation this year is important for confidence in the inflation target. For this to happen, the policy rate needs to be raised even more.”

“The crown was not a determining factor behind the significant increase in inflation, but it did contribute to the rise in inflation somewhat. A stronger crown would be desirable,” the officials said.

Inflation in the country remains high at 8 percent, four times the central bank’s target.