PREVIEW: Riksbank Policy Decision on 18th December 2025 at 08:30 GMT

** PREVIEW: Riksbank Policy Decision on 18th December 2025 at 08:30 GMT**

• The Riksbank is expected to maintain its interest rate at 1.75% on 18th December 2025, aligning with market expectations.
• Recent data shows inflation slightly below forecast, while economic activity has improved, supporting the decision to hold rates steady.
• Analysts predict no change in the Monetary Policy Report (MPR) projections, with potential for a rate cut if inflation falls further.

The Riksbank is poised to keep its interest rate unchanged at 1.75% during its upcoming meeting on 18th December 2025, a decision that aligns with the expectations of market participants and analysts from SEB, Goldman Sachs, and Nordea. This anticipated move comes amid a backdrop of slightly lower-than-expected inflation and improving economic activity metrics, which collectively support the central bank's current monetary stance.

Recent data indicates that inflation has come in below the Riksbank's forecast, with the latest report showing a rate of 2.30% against a projected 2.50%. Despite this, economic activity has shown signs of strength, with third-quarter GDP figures surpassing expectations. However, the labour market remains a point of concern, as the unemployment rate continues to hover above 8%, although recent reports suggest some improvement.

The focus of the upcoming meeting will not only be on the rate decision but also on the updated Monetary Policy Report (MPR) projections. Analysts widely expect these projections to remain unchanged, reflecting a stable outlook for the Swedish economy. SEB anticipates that the Riksbank will maintain its current rate path through 2026, with a potential for a rate cut if inflation decreases more than expected and the labour market weakens further.

Nordea analysts suggest that any deviation from the expected 1.75% rate decision would be a significant surprise, given that inflation has largely followed the central bank's trajectory and economic activity has picked up. They also note the possibility of a slight increase in the terminal rate projection for Q4 2028, although downside risks to inflation could challenge the current MPR guidance.

The Riksbank's Governor will address these issues in a post-policy announcement press conference, providing further insights into the central bank's outlook and policy considerations. Market participants will be closely monitoring this event for any signals that could influence future monetary policy decisions.

Trader Insight:
Market participants are likely to monitor the Swedish krona (SEK) for any volatility following the Riksbank's announcement. Some traders may consider positioning in EUR/SEK, given the potential for currency fluctuations based on the central bank's guidance. Additionally, investors might assess Swedish government bonds for yield opportunities, particularly if the Riksbank signals any future rate adjustments. Analysts also note that the OMX Stockholm 30 Index could be observed for reactions to the economic outlook and monetary policy stance.

Disclaimer: This is not trading advice. For informational purposes only.