Rate cut to 3.75 from 4.00
Riksbank says will proceed cautiously in easing policy
Ratesetters worried about weaker crown

STOCKHOLM, May 8 Reuters Sweden39;s central bank cut its key interest rate to 3.75 from 4.00 on Wednesday, as expected, and said it was likely to cut the rate two more times in the second half of the year if inflationary pressures remain mild.

After a twoyear hiking cycle, central banks around the world are weighing when to start easing policy. But the timing is proving tricky as ratesetters assess geopolitical tensions and fret over getting inflation back to target levels.

Sweden39;s central bank had said in March it saw a good chance to cut rates in May or June, and data since then has confirmed that inflation is set to stabilize around 2 after peaking at over 10 in late 2022.

If the outlook doesn39;t change, we can cut rates a further two times during the second half of the year, Riksbank Governor Erik Thedeen told reporters.

Most analysts in a Reuters poll had forecast a quarter point cut, the first in eight years by the Riksbank.

The focus is now on how fast rates come down.

We have pencilled in a pause for the June meeting followed by three more rate cuts by yearend, Capital Economics39; Chief European Economist Andrew Kenningham said.

He said a positive surprise in inflation figures for April and May could put a June cut back on the table.

The Riksbank, however, is worried easier policy could undermine the Swedish crown and add to…