Stockholm - Sweden's central bank said Thursday it was to cut its interest rate by 0.50 percentage points to 3.75 per cent, the second cut this month.

The cut was to take effect October 29, the Riksbank said.

The bank's board of governors said "the interest rate cuts are aimed at alleviating the effects of the financial crisis" and added that the inflation target of 2 per cent remained.

Sweden was also experiencing the impact of the global financial crisis, and the economy was slowing down, the Riksbank said, adding that effects included higher loan costs for companies and households.

Earlier in October the Riksbank lowered its interest rate by 0.50 percentage points in a joint move 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)