Sweden's central bank has decided to cut its key interest rate to a record low of minus 0.50 percent, saying the measure is necessary to safeguard the bank's target of increasing inflation, which was still "not on a firm footing."

Noting that its "very expansionary monetary policy" had helped strengthen the Scandinavian country's economy and reduce unemployment, the Riksbank said Thursday that inflation was expected to be lower this year than earlier predicted and could hurt confidence in the economy.

The bank said it hopes the cut will help increase inflation to its goal of around 2 percent in 2017.

The rate cut of 0.15 percentage points to minus 0.50 percent takes effect on Feb. 17.