Sweden's Riksbank lowers interest rate to 0.75 pct from 1 pct to combat deflation

The Swedish central bank has cut its key interest rate by 0.25 percentage points, the first cut since October 2012, to combat deflation in the Nordic country.

The Riksbank on Tuesday lowered the key interest rate to 0.75 percent from 1 percent, saying inflation had been "unexpectedly low."

Sweden reported deflation in October and the Riksbank said it expects consumer price index to fall by 0.1 percent for the full year 2013.

It also said it won't start raising rates again until 2015.

Sweden's high household debt has held back the Riksbank from lowering rates earlier and it said the risks associated with the debt remains.