Riksbank (Central Bank) Rate Hold

I was walking through Stockholm's city center last week, clutching a warm cardamom bun and bracing for another round of "will they, won't they" from our central bank. It’s funny how we’ve all become armchair economists lately, checking the Riksbank's website as often as the weather forecast. When the news hit that the rate would stay at 1.75%, the collective sigh of relief from the crowd at the local café was almost audible. It seems for now, my dreams of a slightly larger apartment aren't being crushed by another sudden hike, and that’s a win in my book.

A Steady Anchor for the Swedish Economy

The Decision to Maintain the 1.75% Status Quo

The Riksbank's executive board recently confirmed its decision to keep the policy rate unchanged at 1.75%, a move that surprised few but relieved many.

With inflation sitting at a remarkably "calm" 0.4% year-on-year for January, the bank is prioritizing economic stability over aggressive shifts.

• Inflation Control: Current levels are close to the target, allowing the bank to pause and observe the long-term effects of previous adjustments.
• Economic Resilience: Despite global uncertainties, the Swedish economy has shown a solid growth trajectory that the bank wishes to protect.
• Strategic Patience: Officials emphasized that maintaining the current rate is essential to ensure inflation stays near the 2% target without stifling growth.

Direct Impact on Swedish Borrowers (The Big 3 Banks)

For the average homeowner navigating the "Big 3" banks—Swedbank, SEB, and Nordea—this rate hold translates into predictable monthly costs.

Most lenders have adjusted their average negotiated rates to reflect this stability, offering competitive terms for both floating and short-term fixed loans.

Below is an example of the estimated interest costs for a 1,000,000 SEK ($110,731 USD) mortgage based on current average rates:

Loan Type	Avg. Interest Rate	Monthly Cost (SEK)	Monthly Cost (USD)
3-Month Rolling (Floating)	2.65%	2,208 SEK	$244 USD
1-Year Fixed Term	3.02%	2,517 SEK	$279 USD

• Negotiation Power: With the policy rate steady, borrowers currently have more leverage to negotiate personal discounts off the official "list rates."
• Floating Dominance: Approximately 75% of Swedish households continue to choose the 3-month floating rate, betting on continued stability.
• Safety Margin: Financial advisors suggest that even with the hold, households should budget for a potential 1-2% increase as a risk buffer.

Manufacturing and Industrial Planning

The predictability of the Riksbank's policy is a significant boon for Sweden's massive manufacturing and export sectors.

Companies can now commit to long-term capital investments and research projects with a clearer understanding of their future financing costs.

• Investment Security: Large-scale automation and green energy projects are becoming easier to fund as lending terms remain consistent.
• Global Competitiveness: A stable domestic rate helps manage the Swedish Krona’s value, which is crucial for exporters dealing in international markets.
• Supply Chain Risks: While the local outlook is positive, the Riksbank remains "watchful" of how geopolitical risks might impact global prices.

Conclusion

The Riksbank’s decision to hold the policy rate at 1.75% serves as a stabilizing force for both the housing market and industrial growth. By keeping inflation in check at 0.4%, the bank has provided a rare window of predictability in an otherwise volatile global economy. Borrowers can take this opportunity to refine their financial plans, while businesses can look toward expansion with renewed confidence.

FAQ

Why did the Riksbank decide not to cut rates further if inflation is so low?

The bank believes the current 1.75% rate is necessary to ensure that inflation returns to and stays around the 2% target in the long term. Cutting too early could risk a sudden rebound in prices or weaken the Swedish Krona excessively.

How do the Big 3 banks determine their mortgage rates?

Banks like Swedbank, SEB, and Nordea use the Riksbank's policy rate as a benchmark for their own borrowing costs. They then add a margin to cover their risks and operating costs, though actual rates for customers are often negotiable.

Should I lock my mortgage for 1 year or stay with the 3-month floating rate?

The 3-month floating rate is currently cheaper (approx. 2.65%), but the 1-year fixed rate (approx. 3.02%) offers protection against any surprise hikes. Your choice depends on your personal risk tolerance and whether you believe rates will drop later this year.

What external factors could force the Riksbank to change its mind?

Geopolitical tensions and changes in trade policies from major economies like the US can cause sudden shifts in energy prices or supply chain costs. If these factors drive inflation up, the Riksbank may be forced to raise rates again.

Is the Swedish Krona getting stronger because of this decision?

The Krona has shown some resilience as the Riksbank maintained its steady stance while other central banks remained uncertain. A stable interest rate environment generally supports currency strength by attracting international investors to Swedish bonds.

Sources

• Sveriges Riksbank (Official Monetary Policy Update, February 2026)
• Statistics Sweden (SCB) (Financial Market Statistics - January/February 2026)
• BusinessCraft Nordic (Economic Analysis: Manufacturing and Rate Stability)
• Nordea & SEB Market Reports (Mortgage Rate Trends and Forecasts 2026)