Sweden's central bank Thursday cut its benchmark interest by 25 points to 1.25 percent as growth is expected to slow and the krona has appreciated more than expected.

"Growth in the Swedish economy is now slowing down after an unexpectedly strong outcome so far this year. During the summer the krona has appreciated faster than expected and productivity has also been unexpectedly high. Inflationary pressures are therefore expected to be lower than was forecast in July", the Riksbank said in a statement. 

"Swedish GDP growth has been unexpectedly strong so far this year, which has mainly been due to a large increase in exports of services. But the weak demand from the euro area will now dampen exports and contributes to the forecast for a weak GPD growth over the coming period. Unemployment will therefore increase somewhat over the year and then fall back as economic activity improves".