On December 19, 2024, Sweden's Riksbank cut its benchmark interest rate by 25 basis points to 2.5%, marking a two-year low and signaling the potential end of its easing campaign, with one more cut anticipated in the first half of 2025 [fdc8c321]. This decision represents the fifth reduction in a series aimed at reviving growth in Sweden's economy, which has faced challenges over the past three years [fdc8c321].
Despite the cut, the Swedish krona remained stable at 11.50 per euro, although it has experienced a 3% decline this year [fdc8c321]. Riksbank officials have expressed concerns about inflation risks, particularly in light of economic policies that may follow Donald Trump's re-election [fdc8c321]. The central bank's strategy aims to stimulate the economy, with expectations of tax cuts and increased government spending in 2025 to support recovery [fdc8c321].
In a related context, Norway's central bank, Norges Bank, recently decided to keep its key deposit rate steady at 4.5%, the highest level since December 2008, reflecting a cautious approach amidst a complex economic landscape [743a0e5]. While Norway's economy is performing better than expected, concerns about the weakness of the krone persist [743a0e5]. Norges Bank has indicated that the first rate cut is expected in March 2025, aligning with the global trend of central banks adjusting their strategies in response to changing economic indicators [743a0e5].
As both Sweden and Norway navigate their respective economic challenges, the actions of their central banks will be closely monitored for implications on growth and inflation outlooks in the region [743a0e5][fdc8c321].