--- title: "Riksbank Keeps Key Interest Rate Unchanged at 1.75%" author: PayPro Editor published: 2026-05-11 reading_time: 5 minutes keywords: ["Riksbank", "interest rate", "inflation", "KPIF", "Swish", "Klarna"] ---

Riksbank Keeps Key Interest Rate Unchanged at 1.75%

The Swedish Riksbank has decided to keep its key interest rate unchanged at 1.75% as of May 13, 2026, according to the bank's latest press release.

Low Inflation Provides Breathing Room

Swedish inflation has dropped significantly. The KPIF (Consumer Price Index with fixed interest rates) fell from 1.6% in March to 0.8% in April, according to preliminary figures from Statistics Sweden (SCB).

The underlying inflation, KPI (Consumer Price Index), also decreased from 0.5% in March to -0.1% in April. KPIF-XE (excluding energy) fell from 1.1% in March to 0.0% in April.

Food VAT Reduction Impact

A significant reason for the low inflation is the new reduced VAT rate on food that came into effect on April 1. Food prices decreased by 5.5% from March to April, according to Sofie Öhman, price statistician at SCB.

The VAT reduction from 12% to 6% on food has given consumers increased purchasing power, which can affect payment patterns in the payment sector.

Middle East Conflict Creates Uncertainty

Despite the low inflation, the Riksbank warns about the ongoing conflict in the Middle East. The conflict between the US and Iran and the situation around the Strait of Hormuz increases the risk of higher inflation globally.

"If the war has major global effects and leads to broad inflationary pressures, the Riksbank would need to raise interest rates," writes the bank in its press release.

Bank Reactions

Sweden's major banks reacted to the interest rate decision. Swedbank's average interest rate for variable-rate mortgages is currently 2.76%. All 9 analysts that Infront spoke with expected an unchanged interest rate.

Danske Bank's chief economist Susanne Spector suggests that there is "greater drama in several price indicators" despite the low inflation, with high oil prices, a weaker krona, and improved purchasing managers' indices.

Impact on Payment Sector

The interest rate level has a direct impact on the payment sector:

• Consumer purchasing power: Lower inflation increases consumer purchasing power, which can lead to increased payment volumes
• BNPL market: Interest rates affect buy-now-pay-later services like Klarna and competitors
• Banks' DORA compliance: Interest rates affect banks' risk assessments and budgets for IT security measures
• Payment patterns: The food VAT reduction can shift payment patterns in the short term

Next Steps

The Riksbank's next monetary policy report with forecasts will be presented on June 17, 2026. At that time, the bank will provide a clearer picture of how monetary policy will develop during the year.

For the payment sector, the interest rate decision means a continued period of relative stability, but with monitoring of geopolitical risk factors that could change the situation quickly.

Sources

• Riksbank, press release 2026-05-07
• Statistics Sweden (SCB), Quick CPI April 2026
• Dagens Industri, Hasse Eriksson, 2026-05-07
• GP/TT, Olle Lindström, 2026-05-07
• EFN, 2026-05-07
• Nordea, Annika Winsth
• Danske Bank, Susanne Spector
• Handelsbanken, Claes Måhlen