19.03.202609:01:34UTC+00Riksbank Holds Rates, Cites Middle East War Risks

The Sveriges Riksbank kept its policy rate unchanged at 1.75% for a fourth consecutive meeting in March 2026 and indicated that borrowing costs are likely to stay at this level for the foreseeable future. At the same time, the central bank underscored that the ongoing war in the Middle East is creating considerable uncertainty around its economic outlook. In its highly uncertain baseline scenario, the Riksbank assumes the conflict will have only a moderate impact on inflation and the economic recovery, though policymakers warned it is still too early to fully gauge the consequences. The bank projects that CPIF inflation will return to target by 2029, as temporary pressures stemming from energy prices and VAT adjustments dissipate. Even so, the Riksbank emphasized that it stands prepared to adjust policy in either direction: it is ready to raise rates if inflation proves more persistent—even at the expense of weaker economic activity—or to cut rates if demand deteriorates markedly while inflationary pressures subside.