Thedéen: The Interest Rate Has Been Lowered Sufficiently

The Governor of the Central Bank Erik Thedéen assesses that it is not relevant with several interest rate cuts in the near future. He reiterates this when the protocol from the latest monetary policy meeting is now presented.

» Published: February 04 2025

Thedéen: The Interest Rate Has Been Lowered Sufficiently
Photo: Claudio Bresciani/TT

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"My assessment is that the repo rate has probably been lowered enough with today's decision. An upswing in economic activity towards the end of 2024 supports that assessment", Thedéen notes in the protocol.

The Swedish Central Bank chose to lower the repo rate by 0.25 percentage points to 2.25 percent at the latest meeting. While market players believe that several more cuts are needed, Thedéen has thus signaled that it may now be enough.

"In this situation, I believe it is wise not to be in too much of a hurry, i.e. to have a certain degree of patience, with any further changes to the repo rate", says Thedéen.

The Governor of the Swedish Central Bank argues that monetary policy has a delayed effect, and the impact of the rate cuts that have been implemented has not yet been fully seen.

His colleague on the board, Vice Governor Per Jansson, simultaneously highlights what he calls "an alarming price development in the producer segment". Per Jansson points out that there have been large price increases in recent months, which could in turn affect inflation and ultimately the repo rate.

"This development worries me a great deal, not least against the backdrop of the international environment appearing to become more inflationary", says Jansson.

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By TTEnglish edition by Sweden Herald, adapted for local and international readers

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