Sweden’s central bank on Tuesday lowered its policy rate for the second time this year and said more cuts could be forthcoming in the coming months if inflation remains under control.
The Riksbank made its first rate cut in eight years in May but left it unchanged a month later.
The central bank said Tuesday it was reducing the rate by 0.25 percentage points to 3.5 per cent as “inflation has developed as expected and economic activity is weak.”
Various indicators reinforced “the picture of inflation stabilising” close to the Riskbank’s two-percent target, it added.
The Riksbank added it was now open to cutting rates quicker than it anticipated at its last rate decision in June.
“If the inflation outlook remains the same, the policy rate can be cut two or three more times this year,” the central bank said.
It cautioned, however, that the outlook for inflation…