What is the policy rate?

The current policy rate

The policy rate affects inflation

The policy rate is the rate that governs which rates the banks can deposit in and borrow money from the Riksbank. The banks' deposit and lending rates at the Riksbank in turn affect the banks' interest rates on loans and savings accounts. 

A higher policy rate leads to the banks in turn raising their interest rates. When bank interest rates rise, people and businesses do not buy as much as it becomes more expensive to borrow money. Instead, you get higher interest rates if you save the money in a bank. As people and companies buy fewer things, prices do not rise - inflation falls. Cutting the policy rate leads to banks lowering their interest rates. Lower bank interest rates mean that people and companies buy more - inflation rises.

Read more: How monetary policy affects inflation

Read more in the Monetary Policy Report

The Executive Board of the Riksbank normally makes decisions on monetary policy five times a year. The interest rate decision is announced in conjunction with the publication of the Monetary Policy Report, which describes the deliberations taken by the Riksbank in the process of deciding upon an appropriate monetary policy. The forecast for the policy rate (the interest rate path) is also presented in the Riksbank’s Monetary Policy Report.

The policy rate back in time

The page “Policy rate, borrowing and lending rate” includes a history of the policy rate from 2012 and on. If you are looking for statistics for the policy rate from its introduction in 1994, go to the page “Search interest rates and exchange rates” and look under “Riksbank interest rates”.