The Riksbank’s tasks and operations
The Riksbank is Sweden’s central bank and a public authority under the Riksdag (the Swedish parliament). The Riksbank is responsible for conducting monetary policy, the objective of which is to maintain a low and stable level of inflation over time. We shall also contribute to the stability and efficiency of the financial system, including the ability of the public to make payments. The Riksbank is also responsible for issuing banknotes and coins.
Low and stable inflation
According to the Sveriges Riksbank Act, the Riksbank is to maintain low and stable inflation over the long term. Without neglecting the inflation target, the Riksbank shall moreover contribute to a balanced development of output and employment. The Riksbank has specified an inflation target, according to which the annual change in the consumer price index with a fixed interest rate (CPIF) is to be 2 per cent. The Riksbank determines the level of its policy rate to influence inflation and economic developments. The policy rate is the interest rate that applies to banks who borrow from or deposit money with the Riksbank. The policy rate affects other interest rates in the economy and ultimately economic activity and inflation.
Read more: What is monetary policy?
Stable and efficient financial system – financial stability
A stable and efficient financial system, i.e. a system that can mediate payments, converting savings into funding and manage risks, is required in order for the Swedish economy to function smoothly and grow sustainably. The Riksbank shall contribute to the stability and efficiency of the financial system, including the ability of the public to make payments. This involves the Riksbank overseeing the financial system, being prepared to manage risks, having the capacity to provide temporary liquidity support to banks and other financial institutions in order to mitigate serious shocks in the financial system and cooperating with Finansinspektionen (Swedish financial supervisory authority) and the Swedish National Debt Office on these issues. The Riksbank also provides a payment settlement system, RIX, which handles large-value payments between banks and other agents in a safe and efficient way.
Read more: The Riksbank’s financial stability tasks
The Riksbank's independence
The Riksbank is a public authority under the Riksdag. The Riksdag appoints the members of the Riksbank's General Council. The General Council of the Riksbank in turn appoints the members of the Executive Board of the Riksbank and is responsible for monitoring and controlling the work of the Executive Board.
The Riksdag has given the Riksbank an independent status. This means that the Executive Board of the Riksbank makes the monetary policy decisions without taking instruction from any other parties. By delegating the task of maintaining inflation at a low and stable level to the Riksbank, the Riksdag has ensured that monetary policy is based on a long-term perspective and that there is a sound basis for the credibility of the inflation target.