Riksbank leaves its policy rate unchanged at 1.75% as expected; rate is expected to remain at this level for some time to come

• War in the Middle East makes forecasts very uncertain.
• Monitoring developments closely and will adjust policy if outlook for inflation and economic activity so requires.

• If the war has significantly greater effects on the global economy and leads to a broader and more persistent upturn in inflation, rates would have to be raised, even though economic activity would be significantly lower.
• If the war has negative effects on demand and it becomes more significant at the same time as inflationary pressures become weaker, rates would have to be cut to stimulate demand.

• Q2’26 1.75% vs prev. 1.75%
• Q3’26 1.75% vs prev. 1.75%
• Q4’26 1.77% vs prev. 1.77%
• Q1'27 1.81% vs prev. 1.81%
• Q1'28 1.99% vs prev. 1.99%
• Q1'29 2.17%

The Riksbank's decision to keep the policy rate at 1.75%, as anticipated, reflects a cautious approach amid heightened geopolitical uncertainty due to the ongoing conflict in the Middle East. This policy stance suggests a readiness to adapt, potentially tightening or loosening rates depending on the inflationary pressures and economic activity stemming from these tensions, which could have far-reaching effects on the SEK and broader EUR/SEK dynamics.