Sweden's central bank raises interest rates
Stockholm (dpa) - Sweden's central bank announced Friday it would raise interest rates from 2.75 per cent to 3.00 per cent, citing "strong economic activity and rising inflation."
The board of governors agreed to raise the key repo rate by 0.25 percentage points at their meeting Thursday.
The hike was the central bank's sixth since June 2005, and the Riksbank said it did not rule out further hikes, in line with market expectations.
Due to the strong economic activity and increase in wages, inflation was expected to rise but it was forecast to be moderate, the central bank said, citing high productivity, low domestic cost pressures and international price pressures.
A stronger krona and temporary drop in energy prices were other factors that benefited the bank's aim to keep inflation below the 2.0 per cent target level for the coming two-year period.
Inflation in November measured as consumer price index (CPI) was 1.7 per cent.
The rate hike was expected and would take effect on December 20.
Sweden has not introduced the common European Union currency, the euro. // © 2006 DPA
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