Riksbank, Sweden's central bank, has decided to keep its key interest rate unchanged at 1.25 per cent.

"The Swedish economy has so far grown at a good pace, but is now slowing down due to the weak developments abroad," Riksbank said in its press release following the decision.

"Unemployment is expected to rise somewhat in the coming period and inflationary pressures are low. The Executive Board of the Riksbank decided to hold the repo rate at the continued low level of 1.25% and to lower the repo-rate path to stimulate the economy so that inflation rises towards the target of 2%," Riksbank explained

The decision has generated wide price swings on the Euro/Swedish krona. The language used by the Riksbank seems to suggest that it is looking to weaken the SEK.

FM

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