Sweden's Riksbank on Tuesday launched a 100 basis point hike to interest rates, taking its main policy rate to 1.75%, as it warned that "inflation is too high."

In a statement, the central bank said soaring inflation was "undermining households' purchasing power and making it more difficult for both companies and households to plan their finances."

The sharp hike comes as the U.S. Federal Reserve begins its two-day monetary policy meeting, with markets broadly expecting a 75-basis-point increase as policymakers strive to get soaring prices under control.

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