Sweden's policy interest rate has probably peaked and there are good prospects for inflation to fall back to the central bank's 2% target, but there could still be setbacks, Riksbank Deputy Governor Anna Breman said in a speech on Wednesday.

"Before our next monetary policy meeting on 31 January, we need to continue to monitor developments, assess various risks and be prepared to adjust monetary policy if inflationary pressures are higher or lower," Breman said in a summary of a speech published by the Riksbank. (Reporting by Simon Johnson and Niklas Pollard, editing by Terje Solsvik)