Riksbank Holds Rates in Bet Deflation Threat to Fade

Sweden’s central bank kept its main interest rate unchanged and stuck to a plan to tighten policy at the end of next year in a bet that a surprise half-point cut in July was enough to fight back the threat of deflation.

The repurchase rate was held at 0.25 percent, the Stockholm-based bank said today. All 15 analysts surveyed by Bloomberg predicted the outcome. The bank said it sees the rate at 0.23 percent in the fourth quarter and 0.22 percent in the first and second quarters next year, signaling a chance for another reduction. The rate in the fourth quarter next year will average 0.4 percent, the bank said.