Sweden's central bank said on Wednesday it was holding its key rate steady at 1.50 percent in order to underpin economic growth and maintain inflation around the 2.0 percent target.
"The repo rate needs to remain low to support economic activity and ensure inflation is in line with the target of 2.0 percent," the bank said in a statement.
In May, the latest month for which figures are available, inflation in the Scandinavian country was 1.0 percent, compared to 1.3 percent in April, according to Statistics Sweden.
"The Swedish economy has developed more strongly than expected so far this year... The weak developments in the euro area subdue Swedish exports and the increased unease affects sentiment among households and companies," the central bank said.
"The repo rate is expected to remain at this low level for just over a year," it added.
The bank last cut its key rate on February 16, by a quarter of a point, due to the deteriorating growth outlook in the neighbouring eurozone.
Sweden, which has some nine million inhabitants, has been a member of the European Union since 1995 but voted against joining the eurozone in a 2003 referendum.
As a result its central bank, the Riksbank, and not the European Central Bank in Frankfurt, is responsible for Swedish monetary policy.