FALCON POWERS – A reduction in the Swedish interest rate by half of its current level is possible and expected by the end of the current year, as the Governor of the Central Bank confirmed that the inflation results in Sweden this month are close to the desired target. “If these indicators continue as they are during the next month, it is expected that the Swedish Central Bank will decide to make two additional rate cuts during the second half of the year.”
This expected cut twice during the current year means a reduction in interest rates between 1 to 1.5 percentage points, which means reducing the interest rate to half of what it is today, as the basic interest rate is 3.75% and it is between 4.25% to 8% in Swedish banks, and it can actually drop to around 3% to 4.5%.
The Swedish Central Bank had previously cut the interest rate in the last meeting of the bank, from 4.0% to 3.75%, and according to the Director of the Swedish Central Bank, it is expected to remain stable in June, with the expectation of implementing two additional cuts during the second half of the current year.
