Sweden's central bank on Thursday announced its steepest interest rate hike since 2000 to combat inflation, as monetary policymakers worldwide scramble to tame runaway prices.
After lifting the rate from zero to 0.25 per cent in May, the Riksbank said it was raising it by 50 basis points to 0.75 per cent this time as prices "have been rising considerably faster than expected since the start of the year".
The bank also forecasts further rate cuts, saying the rate would be "close to 2 per cent at the start of next year".
It also said its asset holdings would shrink faster than previously decided in April, purchasing bonds for 18.5 billion kronor ($1.8 billion) -- half of what had been previously planned.
"With this monetary policy, inflation is expected to fall back next year and be close to 2 per cent from 2024", it said.
The bank also slashed its GDP growth forecast to 1.8 per cent and 0.7 per cent for 2022 and 2023 respectively, down from 2.8 and 1.4 per cent.
