By Dominic Chopping


STOCKHOLM--Sweden's central bank on Thursday lifted its key policy rate to 4.00% from 3.75%, as expected, and said rates could be raised further as it continues to fight stubbornly high inflation.

The Riksbank's new rate path now implies the rate will peak at around 4.10% in the third quarter of 2024, from 4.05% previously, and remain at that level until a first cut in 2025.

"The assessment is that monetary policy needs to be contractionary for a longer period of time for inflation to fall back and stabilise," the central bank said.

The central bank also said been it is fighting a weak krona and it said Thursday that it will begin hedging a part of its foreign exchange reserves by selling $8 billion and 2 billion euros ($2.13 billion) for Swedish kronor.

The Riksbank meets five times a year but it has now decided to increase the number of meetings to eight from next year.

"More meetings makes it easier for the Riksbank to more rapidly adapt monetary policy to the prevailing situation and communicate a coherent view on economic developments more often," said Governor Erik Thedeen.

Central bank decisions have dominated markets over the past week. On Wednesday, the U.S. Federal Reserve held rates steady, while the Bank of England is due to decide on rates later Thursday, along with Turkey and South Africa. A week ago, the European Central Bank opted to raise rates as it continues to battle sticky inflation.


Write to Dominic Chopping at dominic.chopping@wsj.com


(END) Dow Jones Newswires

09-21-23 0414ET