Sweden's Central Bank Lowers Interest Rates Amid Economic Slowdown

In a bid to counteract sluggish economic growth, Sweden's central bank, known as the Riksbank, has reduced its key interest rate from 2.25% to 2.00%. The decision was made amid concerns about weak price pressures and uncertainty stemming from U.S. President Donald Trump's unpredictable tariff policies.

The rate reduction was anticipated, and the central bank signaled that additional cuts might occur before year's end if inflation continues to underperform. The Riksbank has reactivated its easing cycle, which had seemed to conclude earlier in the year. The economic recovery that had started last year is losing steam, and Swedish inflation is expected to be lower than previously forecasted.

Following the announcement, the Swedish crown weakened against the euro. Analysts have mixed expectations for future interest rates, but some predict a further cut to 1.75% by September. Meanwhile, Norway's central bank is expected to keep its rates unchanged, maintaining a 17-year high.

(With inputs from agencies.)