--- title: "Riksbank Keeps Key Rate Unchanged at 1.75% - But Warns of Oil Crisis Risk" description: "Riksbank maintains rate at 1.75% despite low inflation, but warns that Middle East conflict could lead to higher rates in the future." published: true date: "2026-05-10" author: "PayPro Editor" keywords: ["Riksbank", "interest rate", "inflation", "Iran", "KPIF", "economy"] reading_time: "4 minutes" ---

Riksbank Keeps Key Rate Unchanged at 1.75% - But Warns of Oil Crisis Risk

Stockholm, May 10, 2026 — The Riksbank decided on May 7 to keep its key interest rate unchanged at 1.75%, a level effective from May 13. The decision came despite KPIF inflation for April landing at just 0.8 percent — well below the Riksbank's 2 percent target.

Balancing Act Between Low Inflation and Geopolitical Risk

The Riksbank's decision reflects a complicated economic situation where the central bank is balancing between two conflicting factors:

• Low inflation: KPIF April 2026: 0.8 percent (SCB)
• Geopolitical risk: Conflict in Iran and threat of closed Hormuz Strait

"If the war in the Middle East leads to broad and sustained inflation, we would raise the key interest rate," the Riksbank stated in its press release on May 7.

Economic Effects of the Conflict

The government has already reacted to the uncertain situation by lowering its GDP forecast from 2.8 percent to 2.3 percent for 2026. Finance Minister Elisabeth Svantesson has warned that the economic situation could worsen further if the oil crisis is not resolved.

Oil prices have remained elevated due to the conflict, creating pressure on inflation even though SCB's figures show a downward trend.

Swedbank Variable Mortgage Rate: 2.76%

For consumers, the Riksbank's decision directly affects mortgage rates. Swedbank's variable mortgage rate (after negotiation) currently stands at 2.76 percent, which follows the development in the key interest rate.

Fixed-rate mortgages are indirectly affected through inflation expectations. The low KPIF figures are keeping fixed rates in check, while variable rates follow the key interest rate more directly.

Expert Comments

Erik Thedéen, Riksbank Governor: "The risk that the war leads to higher inflation has increased somewhat."

Annika Winsth, Chief Economist, Nordea: "The decision was expected and prudent. The Riksbank shows patience in uncertain times."

Elinor Odeberg, Chief Economist, Arena Idea: "The Riksbank should have lowered rates due to the high unemployment rate."

Next Rate Decision: June 17

The Riksbank's next monetary policy meeting is scheduled for June 17, when we will see how the development continues. The market will closely monitor indicators such as:

• KPIF measures for May and June
• Oil price development
• Global and domestic economic indicators

Connection to the Payments Market

The rate decision has direct implications for the payments market through:

• Consumer purchasing power: Lower rates increase disposable income
• Business investment: Interest rate levels affect investment decisions
• Payment behavior: Economic uncertainty affects consumer payment patterns

Swish and other payment solutions will continue to be affected by the overall economic development and consumers' ability to pay.

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Source: Riksbank (press release May 7, 2026), SCB (KPIF April 2026), Aftonbladet, Dagens Nyheter

Published by PayPro.se - Sweden's Independent Payment Analysis