In November 2025, Sweden’s Riksbank opted to keep the repo rate steady at 1.75%, matching market expectations and the previous reading from October. This decision marks the third consecutive hold after a series of rate cuts from a peak of 2.75% in November 2024. The pause reflects the bank’s cautious approach amid easing inflation pressures and a slowing economy.

Drivers This Month

• Inflation slowed to 2.1% YoY in November, down from 2.4% in October.
• GDP growth decelerated to 0.2% MoM in November versus 0.4% in October.
• Unemployment remained stable at 6.8%, consistent with prior months.

Policy Pulse

The Riksbank’s 1.75% rate remains below the 12-month average of 2.1%, signaling a gradual easing cycle since late 2024. The bank’s inflation target of 2% is nearly met, allowing for a pause in tightening. The decision underscores a balanced stance, weighing inflation containment against growth risks.

Market Lens

Immediate reaction: The SEK appreciated modestly by 0.3% against the EUR within the first hour post-announcement, reflecting market relief at the steady rate. Swedish 2-year government bond yields declined by 5 basis points, signaling expectations of a prolonged low-rate environment.

Core macroeconomic indicators for November 2025 paint a nuanced picture. Inflation, measured by the CPI excluding energy and food, eased to 1.8% YoY from 2.0% in October, indicating cooling price pressures. Meanwhile, retail sales contracted by 0.4% MoM, the first decline since August, suggesting weakening consumer demand.

Inflation and Growth

Headline inflation stood at 2.1% YoY in November, down from 2.4% in October and below the 12-month average of 2.3%. GDP growth slowed to 0.2% MoM, compared to 0.4% in October and 0.3% in September. This deceleration aligns with global trends of moderating growth amid tighter financial conditions.

Labor Market and Fiscal Policy

Unemployment held steady at 6.8%, unchanged from October and near the 12-month average of 6.7%. The government’s budget deficit narrowed slightly to 0.9% of GDP in November from 1.1% in October, reflecting improved tax revenues and controlled spending. Fiscal policy remains moderately expansionary, supporting growth without overheating the economy.

External Shocks & Geopolitical Risks

Heightened geopolitical tensions in Eastern Europe and supply chain disruptions continue to pose risks. Energy prices stabilized in November after volatility in prior months, easing inflationary pressures. The Riksbank’s cautious stance reflects these external uncertainties.

What This Chart Tells Us

Market Lens

Immediate reaction: SEK strengthened by 0.3% vs. EUR, while 2-year yields fell 5 bps, reflecting market confidence in the bank’s steady approach. Inflation-linked bonds saw modest gains, pricing in subdued inflation risks.

Looking ahead, the Riksbank’s forward guidance emphasizes data dependency. Three scenarios frame the outlook:

Bullish Scenario (20% Probability)

• Inflation falls below 1.5% YoY by Q2 2026.
• GDP growth rebounds to 0.5% MoM by spring.
• Rate cuts resume, potentially lowering the repo rate to 1.25% by mid-2026.

Base Scenario (60% Probability)

• Inflation stabilizes around 2% through 2026.
• GDP growth remains modest at 0.2–0.3% MoM.
• Rates hold steady at 1.75% for the foreseeable future.

Bearish Scenario (20% Probability)

• External shocks push inflation above 3% YoY.
• Growth stalls or contracts, unemployment rises.
• Riksbank may consider rate hikes to combat inflationary pressures.

Fiscal policy will play a key role in cushioning downside risks, while geopolitical developments remain a wildcard. Financial markets are expected to remain sensitive to inflation data and global risk sentiment.

The Riksbank’s decision to hold rates at 1.75% in November 2025 reflects a prudent balancing act amid easing inflation and slowing growth. While the pause aligns with the bank’s inflation target, external risks and fiscal dynamics warrant close monitoring. Market reactions suggest confidence in the bank’s steady approach, but volatility could rise if inflation deviates or geopolitical tensions escalate.

Structural trends such as Sweden’s aging population and digital transformation continue to shape long-run monetary policy considerations. The Riksbank’s data-driven stance will likely persist, with flexibility to adjust as economic conditions evolve.

Key Markets Likely to React to Riksbank Rate Decision

The Riksbank’s rate decision typically influences Swedish krona (SEK) currency pairs, local bond yields, and equities sensitive to interest rate changes. Below are five key tradable symbols with historical correlations to the Riksbank’s policy moves:

• SEKEUR – The SEK/EUR pair often reacts sharply to Riksbank decisions, reflecting shifts in monetary policy expectations.
• OMXS30 – Sweden’s benchmark equity index, sensitive to interest rate changes impacting corporate earnings.
• USDSEK – Tracks SEK strength against the USD, influenced by Riksbank policy relative to the Fed.
• BTCUSD – Bitcoin’s price often moves inversely to interest rate hikes, reflecting risk sentiment shifts.
• ERIC-B.ST – Ericsson’s stock, a major Swedish exporter, sensitive to currency and interest rate fluctuations.

FAQs

What was the Riksbank’s rate decision for November 2025?

The Riksbank held the policy rate steady at 1.75%, unchanged from October 2025.

How did inflation in Sweden change in November 2025?

Inflation eased to 2.1% YoY in November, down from 2.4% in October.

What are the main risks facing Sweden’s economy?

Key risks include geopolitical tensions, supply chain disruptions, and potential inflation volatility.

Takeaway: The Riksbank’s steady rate decision reflects a cautious approach amid easing inflation and slowing growth, with markets pricing in a balanced outlook but remaining alert to external risks.

Updated 12/18/25