The Riksbank, Sweden's central bank, reduced its main interest rate, according to a statement from the bank.The repo rate was lowered by 25 basis points to 1%, in a move generally expected by economists.

In its statement, the Riksbank said the cut was made due to weak domestic household consumption, rising unemployment, and a lack of inflationary pressures. In terms of the latter, the country is still some distance away from the bank's upper target of 2%.

The bank also said in its statement that the economic sluggishness of the euro area is having an impact on Sweden. The repo rate is expected to remain around the newest low level for the coming year.
The rate cut is the third enacted by the Riksbank this year.