🏦🇸🇪Cable FX Macro Weekly Note: Riksbank Policy Rate Decision

**As seen in Risk In The Week report 09/21/25, get full access now!

The Riksbank decided to hold the policy rate (repo rate) steady at 2%, unchanged from the previous meeting in June. This decision aligns with the bank's ongoing efforts to stabilize inflation at its 2% target amid a slowing economic recovery and global uncertainties. Economic growth in Sweden has weakened, with high unemployment persisting and the recovery losing momentum since last year. Meanwhile, inflation is projected to remain close to the target but with risks from global factors, such as geopolitical tensions and energy prices.

There is a roughly 50% probability of a rate cut in the second half of 2025, with market expectations (e.g., from Swedbank economists) pointing to a cut at the upcoming September meeting. However, economists at Commerzbank argued against a rate cut this month as growth is looking to pick up in Sweden, the output 2Q figures support the Riskbank’s view of an economic recovery. Strategists at Nordea expect the Riksbank to announce that the policy rate will remain unchanged at 2.0% at its meeting on 23 September. They think the door will likely remain ajar for a future rate cut, but less so than at recent monetary policy meetings. This would reinforce the desk’s view that the Riksbank is done cutting.