STOCKHOLM - THE Swedish central bank said on Thursday it has decided to slash its key interest rate by half a percentage point to 3.75 per cent and said it planned to make further cuts within six months.

'It is assessed that over the coming six months the repo rate will need to be cut by a further 0.5 percentage points,' the bank said in a statement.

The rate reduction is the second since Oct 8.

'The interest rate cuts are aimed at alleviating the effects of the financial crisis on the real economy and at the same time attaining the inflation target of 2 per cent,' it said. -- AFP