Stockholm  - Sweden's central bank said Wednesday it would keep interest rates steady at 4.25 per cent, citing that the level was sufficient to bring down inflation.

The board of governors of the Riksbank said that although inflation was high "economic activity remains good, but there are signs of slackening."

Keeping the interest rate at around 4.25 per cent "over the coming year will contribute to bringing inflation back towards the target of 2 per cent a couple of years ahead," they said in a statement.

The decision, taken at their meeting Tuesday, was in line with what many analysts had anticipated.

Central bank governor Stefan Ingves later told reporters that higher energy and food prices continued to contribute to inflation.

The bank's latest interest rate hike of 0.25 percentage points was approved in February.

Sweden has not introduced the common European Union currency, the euro. (dpa)