Sveriges Riksbank, the central bank of Sweden, on Thursday, increased the Repo rate from -0.25% to zero.
"Developments since the monetary policy meeting in October have on the whole been as the Riksbank expected. The economic prospects and outlook for inflation are largely unchanged," Riksbank said in a statement.
"The Executive Board has therefore decided to raise the repo rate from –0.25 percent to zero percent."
Riksbank said that the inflation rate in the country had hovered around 2% since 2017, and the bank expects it to remain close to the target in the coming years.
The Swedish central bank doesn't intend to increase the rate further in the next two years at least, or cut back, unless the overall economic outlook or inflation prospects change significantly.
Why It Matters
Riksbank became the first bank to exit negative interest rates that were introduced over the last six years by several central banks as a countermeasure against rising inflation. The Swedish bank had introduced the negative interest rates in 2015.
The European Central Bank and other central banks of E.U. countries continue to have negative repo rates, and the Swedish economy movements following the rate increase could be closely watched for cues on the decision's impact.
Earlier in the day, the Bank of Japan announced that it would maintain its negative repo rate of -0.1%, causing the country's stock market to slide.
The Swedish krona remained largely unchanged against the euro, trading at 10.4640.
The Stockholm Stock Exchange's OMX Stockholm 30 index was down 0.39% at 1,784.88.