Sweden’s central bank raised interest rates by a full percentage point on Tuesday, hiking its policy rate to 1.75% in a move that surprised the market.
The raise beat majority estimates in a Reuters poll for a 75 basis point hike as the country faced rising inflation to a 30-year high of 9% in August from the effects of surging energy prices that weighed on the Swedish economy.
A full percentage point rate hike on Tuesday is the biggest one since November 1992, when the central bank also made a similar move.
“By raising the policy rate more now, the risk of high inflation in the longer term is reduced, and thereby the need for greater monetary policy tightening further ahead,” Sweden’s Riksbank said in a statement.
