Sveriges Riksbank Raises the Policy Rate to 2%, Its First Increase Since 2023
Sveriges Riksbank raised its policy rate by a quarter point to 2%, its first increase since 2023, and said more are likely in the coming year if the outlook stands.
For Swedish households and businesses, the decision turns policy from a long pause towards tightening, though CPIF inflation, the bank’s target measure, was only 1.5% in September. The bank says temporary fiscal measures are still holding measured inflation back, and expects stronger activity, cost increases from supply disruptions and a weaker krona to help push inflation above 2% next year. In The Edge’s reading, the September rate path the bank says it is following is consistent with at least two more quarter-point increases by the third quarter of 2027, assuming moves of that size. The path is a forecast, not a commitment to a number of moves.
The Board raises the rate after a long pause
The increase of 0.25 percentage points applies from 11 November. The deposit rate rises to 1.90% and the lending rate to 2.10%.
The liquidity facility rate, set 0.30 point above the policy rate, moves to 2.30%. The bank published a Monetary Policy Update with the decision, which carries no new forecasts.
The last increase came in September 2023, when the rate went up by a quarter point to 4%. Easing began in May 2024 with the first of eight cuts, worth a cumulative 2.25 percentage points.
The last of those cuts took effect on 1 October 2025 and left the rate at 1.75%. The Executive Board then left it unchanged at eight decisions in a row, the most recent on 24 September. The new 2% matches the level in force from 25 June to 30 September 2025.
The Board’s reasons start abroad. Global inflationary pressures remain elevated because of supply disruptions linked to the war in the Middle East, it said, with energy prices up further and inflation abroad higher.
At home, preliminary statistics show GDP and employment rose in the third quarter, both in line with its forecast. Household sentiment fell in October, while business sentiment rose further. The bank expects economic conditions to strengthen further and become normal next year, with the labour market continuing to improve.
Inflation excluding the fiscal measures already stands at 3%
Headline CPIF inflation of 1.5% in September matched the latest forecast, the Riksbank said. Excluding the direct effects of temporary fiscal policy measures, CPIF inflation was 3%.
The measure the bank says best reflects underlying inflation, which also excludes energy prices, was 1.6%. That was slightly lower than expected, though indicators still point to cost pressures above normal.
Statistics Sweden’s September release shows which prices moved the headline most. Food and non-alcoholic beverage prices were 6.5% lower than a year earlier, which took 0.8 percentage point off CPI inflation.
Energy pushed the other way. Electricity prices rose 17.0% over the year and fuel 20.0%. From August to September alone, electricity rose 11.7% and fuel 13.3%.
CPIF inflation rose from 0.7% in August to 1.5%. The CPIF excluding energy, which the statistics office says is often used as a gauge of underlying inflation, stayed at 0.5%.
That 0.5% is a different series from the bank’s 1.6%, which, as the bank describes it, excludes energy prices as well as the direct effects of the temporary fiscal measures. CPI inflation, which unlike the CPIF reflects mortgage rates, was 1.1%, up from 0.3%.
Swedish consumer prices (12-month change, in %)
| Measure | September | August |
|---|---|---|
| CPI | 1.1 | 0.3 |
| CPIF | 1.5 | 0.7 |
| CPIF excluding energy | 0.5 | 0.5 |
September release of 14 October 2026; the CPIF keeps household mortgage rates fixed and is the bank’s target variable.
At 2%, the new policy rate is 0.5 percentage point above September’s CPIF inflation. Against CPIF inflation excluding the fiscal measures it sits 1 point below, and against the bank’s underlying measure 0.4 point above. These are simple backward comparisons, not a forward-looking real rate.
The krona has weakened this year, as the Executive Board noted. At the bank’s daily rate of 3 November, a dollar cost SEK 9.7965, against SEK 9.2013 on 30 December 2025.
That puts the krona 6.1% weaker against the dollar since the end of last year. Against the euro the fall is smaller, at 1.2%, with the euro at SEK 10.9515 on 3 November.
The September path points to further increases
Because the update carries no new forecasts, the September Monetary Policy Report remains the bank’s latest projection. In it the Board said the rate should rise more than the June forecast showed, with increases beginning this year if the outlook remained unchanged.
The path averages 1.85% in the fourth quarter of 2026. If the new rate stays in place through December, the fourth-quarter average comes to 1.89%, on The Edge’s calculation, slightly above the path.
The path then climbs to 2.07% in the first quarter of 2027 and 2.38% by the third. It stands at 2.41% in the third quarter of 2028 and 2.35% a year later.
The September policy rate forecast (quarterly averages, in %)
| Quarter | September | June |
|---|---|---|
| Q4 2026 | 1.85 | 1.82 |
| Q1 2027 | 2.07 | 1.89 |
| Q2 2027 | 2.24 | 1.93 |
| Q3 2027 | 2.38 | 1.97 |
| Q3 2028 | 2.41 | 2.10 |
Monetary Policy Report forecasts as published in the Riksbank’s decision of 24 September 2026, with the June 2026 report as the previous column; the November update carries no new forecasts.
The same report saw CPIF inflation at 1.5% for 2026 as a whole and 2.1% in 2027. It forecast 2.4% for 2028. GDP growth was forecast at 2.8% this year, up from 2.2% in June.
Unemployment is forecast to ease from 8.6% this year to 8.1% in 2027. CPI inflation, which also reflects mortgage rates, is forecast at 3.2% in 2027, against 0.9% this year.
September forecasts for Sweden (annual averages, in %)
| Measure | 2026 | 2027 | 2028 |
|---|---|---|---|
| CPIF | 1.5 | 2.1 | 2.4 |
| CPI | 0.9 | 3.2 | 3.1 |
| GDP | 2.8 | 2.4 | 1.3 |
| Unemployment | 8.6 | 8.1 | 7.6 |
| Policy rate | 1.8 | 2.3 | 2.4 |
Monetary Policy Report forecasts as published in the Riksbank’s decision of 24 September 2026; CPIF, CPI and GDP are annual percentage changes, unemployment and the policy rate are annual averages.
The bank flagged risks on both sides. Supply disruptions persist, raising the risk that inflation turns out too high, and the economy could grow faster than expected.
Against that, the strength of the labour market recovery is uncertain. Global demand could weaken on geopolitical uncertainty, concerns about AI investments and weak public finances in some countries. In September the Board said it would raise the rate faster than forecast if inflation showed signs of a larger and more persistent upturn.
The bank plans foreign currency loans to cut its exchange rate risk
In a separate release, the Riksbank said it plans to finance an estimated SEK 200 billion, or $20.4 billion, of its foreign currency reserve with foreign currency loans via the Swedish National Debt Office.
Since a 2021 decision, the bank has financed the reserve itself, offsetting its foreign currency assets with liabilities in kronor. The bank cites the balance sheet’s sensitivity to exchange rate moves; with loans in the same currencies as the assets, those moves cancel each other out.
The loans would also replace the FX swaps the bank has used for currency hedging since 2023. Borrowing is provisionally set to start in the first quarter of 2027, provided market conditions remain stable.
Implementation would combine sales of foreign currency for kronor with the replacement of existing swaps. Full implementation is expected to take 12 to 18 months, with transactions spread evenly to minimise the effect on the exchange rate.
The bank put the reserve at an estimated SEK 450 billion, or $45.9 billion, at the end of October. The planned borrowing equals 44% of that. The change is not meant to alter the reserve’s long-term size and serves no monetary policy purpose, the bank said.
The reserve is primarily intended to provide foreign currency liquidity support to banks operating in Sweden, among others, to intervene in the foreign exchange market and to meet Sweden’s obligations in the IMF’s Special Drawing Rights system. Under the Sveriges Riksbank Act, total borrowing may be at most 5% of GDP at the time of the decision.
What to watch: Statistics Sweden publishes its October CPI flash estimate on 5 November at 07:00 GMT. The minutes of this meeting are due on 10 November, the day before the new rate applies. The full October CPI follows on 12 November at 07:00 GMT. The Board meets on 15 December and announces its decision on 16 December, with a Monetary Policy Report carrying new forecasts; the bank will give further detail on the reserve financing with that decision.
Figures are from Sveriges Riksbank’s press releases of 4 November 2026 (“Policy rate raised to 2 per cent” and the plan to finance part of the foreign currency reserve with foreign currency loans), its decision of 24 September 2026 with the forecasts of its Monetary Policy Report of the same date, its policy rate table, decision pages and daily exchange rates, and Statistics Sweden’s CPI release of 14 October 2026. Dollar equivalents are at the Riksbank’s rate of SEK 9.7965 per dollar on 3 November 2026. Differences, changes, ratios and dollar equivalents not attributed to a source are The Edge’s calculations.
Sources: Sveriges Riksbank, Statistics Sweden, The Edge.
