Sweden's Central Bank Holds Key Rate, Signals Increased Likelihood of Future Hike Amid Middle East Conflict Fallout

The Riksbank maintained its key policy rate at 1.75% for the sixth consecutive meeting, aligning with market expectations. However, the central bank indicated a higher probability of a rate hike later in the year, citing risks of increased inflation stemming from the Middle East conflict. Policymakers are closely monitoring inflation trends and domestic economic performance, while remaining prepared to adjust monetary policy in response to potential increases in energy and fuel prices.