Sweden's central bank, Riksbank, announced on Tuesday that it raised its policy rate by 100 basis points (bps) to 1.75%. Reuters' estimate was pointing to a 75 bps rate increase.
Market reaction
With the initial reaction, EUR/SEK fell to a fresh daily low of 10.7305 before recovering modestly. As of writing, the pair was trading at 10.7720, where it was down 0.15% on a daily basis.
Key takeaways from policy statement
"Forecast for policy rate is that it will continue to be raised in coming six months."
"Development of inflation going forward is still difficult to assess and Riksbank will adapt monetary policy as necessary to ensure that inflation is brought back to target."
"Monetary policy now needs to be tightened further to bring inflation back to target."
"By raising policy rate more now, risk of high inflation in longer term is reduced, and thereby need for greater monetary policy tightening further ahead."
"Asset purchases will continue in accordance with decision in June but are expected to cease at end of year."
