Swedish inflation falls more than expected, hits 5-month low in March

Data released by Statistics Sweden on Tuesday showed that Sweden's inflation eased more than expected to a five-month low in March. Sweden's inflation fell to 1.3 percent in March, missing expectations at 1.5 percent in a Reuters poll.

March inflation was the lowest since October 2016, when the rate was 1.2 percent. On a monthly basis, consumer prices remained unchanged after rising 0.7 percent in February. Prices were expected to gain 0.2 percent.

Underlying inflation (CPIF), which excludes the effect of interest rate changes in mortgages, came in at 1.5 percent. CPIF also missed expectations at 1.6 percent. Month-on-month, the CPIF remained unchanged in March, while it was forecast to edge up 0.1 percent.

In February, Sweden's underlying annual inflation hit the central bank's 2 percent target for the first time since December 2010. But the central bank remains skeptical about stability of inflation around 2 percent until late in 2018, and has said it does not plan to raise rates before the start of next year.