Swedish central bank cuts policy rate for 1st time since 2016

By Tuba Ongun

Sweden's central bank on Wednesday delivered a rate cut for the first time since 2016, and signaled two more reductions during the second half of the year.

The Riksbank cut its main policy rate by 0.25 basis points to 3.75%. "Inflation is approaching the target while economic activity is weak. The Riksbank can therefore ease monetary policy," it said in a statement.

"If the outlook for inflation still holds, the policy rate is expected to be cut two more times during the second half of the year," the central bank added.

According to latest data, Sweden's annual inflation rate eased to 4.1% in March, from 4.5% in February.

After the decision, krona lost value against the euro to above 11.7200.