Stockholm - Sweden's central bank said Thursday it was to cut its interest rate by 1.75 percentage points to 2.00 per cent, citing "an unexpectedly rapid and clear deterioration in economic activity since October."

The cut aimed at reducing "the fall in production and employment," the bank's board of governors said.

The cut was to take effect December 10, the Riksbank said.

The bank's board of governors said the inflation target of 2 per cent remained.

In October the Riksbank cut its rates twice. One of the cuts was made jointly with the Bank of Canada, the Bank of England, the European Central Bank, the Federal Reserve, and the Swiss National Bank.

Sweden is a member of the European Union but not in the euro zone. (dpa)