SEK fell against other major currencies in the European session on Wednesday as investors reacted to today’s interest rate cut by Sweden's central bank and its near-term rate guidance.
Riksbank decided to lower its key interest rate by 25 basis points to 3.25%. It was the third rate reduction this year. In addition, the central bank stated that additional rate cuts could come at its remaining two meetings this year (in November and December) if the outlook for Sweden's inflation and economic activity remains unchanged. Moreover, Riksbank noted that a 50-basis-point cut is possible at one of these meetings. For the first half of 2025, the Bank signalled one or two more rate decreases. Riksbank argued that faster-than-previously communicated rate changes, which imply a relatively significant shift of monetary policy in a more expansionary direction, will improve households’ finances and make it easier for companies to invest.