Sweden's central bank, the Riksbank, has cut the country's key interest rate by 0.25 percentage points to 1.75 percent, with the bank's director adding that there will be no further cuts. "Lower interest rates will give the economy further support," he told a press conference. The policy rate is the central bank’s main monetary policy tool. It decides which rates Swedish banks can deposit in and borrow money from the Riksbank, which in turn affects the banks’ own interest rates on savings, loans and mortgages. If bank interest rates are high, it’s expensive to borrow money, which means people spend less and as a result inflation drops.