The Swedish central bank on Wednesday said it would keep its key interest rate unchanged at 0.25 percent, forecasting it would stay at low levels until the second half of next year.
The Riksbank said the move is to help support the recovery of the country's economy and to be able to reach its inflation target of 2 percent.
"The world economy is continuing to improve and this benefits economic developments in Sweden," it said, "however, the picture is not clear-cut. For example, industrial production is still weak."
The bank noted that the recovery "is from a low level" and although the labor market doesn't seem to be as weak as forecast in October, unemployment is still expected to increase in the next 12 months.
It added it expects to raise its rates to "more normal levels" sometime in the second half of 2010.
Nordea chief economist Annika Winsth said the announcement was in line with analyst expectations, but that the bank is somewhat cautious in its forecasts for the labor market. "It's been careful in its revisions, and so we still think it will start raising the rates in April," she said.
The Riksbank kept its repo rate unchanged also in its last decision which was announced in October.