Sweden’s central bank raised its policy rate by a quarter percentage point to 3.75% as expected on Thursday and said it had decided to increase the pace of government bond sales while forecasting at least one more rate hike this year.
Headline inflation in Sweden has started to come down but, at 6.7% in May, remains significantly above the central bank’s 2% target.
Analysts in a Reuters poll ahead of the decision were unanimous in forecasting a quarter-point hike.
“The forecast is for the policy rate to be increased at least one more time this year,” the Riksbank said in a statement.
The Swedish crown, which has weakened sharply against the euro this year, saw volatile trade and briefly hit a fresh record low before recovering some of the lost ground by 0954 GMT.
At its previous meeting in April, the Riksbank raised its key rate by a half percentage-point to 3.50% and said it expected to hike again by 25 basis points in June or September before drawing a line under its tightening cycle.
