Sweden Raises Benchmark Interest Rate by 1%p... 'Ultra Step' in 30 Years

Ulf Kristersson, leader of the Moderate Party, who is mentioned as the next Prime Minister of Sweden (left). [Image source=Yonhap News]

[Asia Economy Reporter Donghyun Choi] Sweden has implemented an 'ultra step' by raising its benchmark interest rate by 1.0 percentage point.

According to the Associated Press on the 20th (local time), Sweden's central bank, Riksbank, raised the country's benchmark interest rate by 1.0 percentage point to 1.75%. This exceeds the 0.75 percentage point increase initially expected by the market. Sweden's 'ultra step' is the first in about 30 years since November 1992.

The Swedish central bank stated, "Inflation is too severe," adding, "Household purchasing power is declining, making it difficult for both households and businesses to plan their finances."

From August last year to August this year, Sweden's consumer price index (CPIF) inflation rate reached 9%.

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