Sweden’s central bank raises interest rates by 100 basis points amid ‘very high inflation’

Sweden’s central bank has raised the main interest rate by 100 basis points to 1.75 percent, which is the largest increase since 1993, according to the bank’s statement on Tuesday.

The bank said “Inflation is very high, it empties the purchasing power of families and makes it difficult for companies and families alike to plan their financial conditions…”

In addition to that, the bank pointed out that it will increase the interest rate in the future more than previously expected.

The interest rate is now expected to reach 2.5 percent in 2023 compared to 1.9 percent in its previous forecast, the statement mentioned.

The bank added that it expected to raise interest rates again within the next six months, in order to ensure that inflation returned to the target figure at the level of 2 percent.

The sharp rise comes as the U.S. Federal Reserve kicks off its two-day monetary policy meeting, with markets widely anticipating an increase of 75 basis points as policymakers seek to control high prices.