Monetary Policy Report, September 2021

In conjunction with an increasing number of people having been vaccinated, and restrictions around the world being eased, global growth has risen, supported by economic policy. Since the monetary policy meeting in June, outcomes and indicators have continued to confirm that the recovery in Sweden and abroad is strong.

Rapidly rising energy prices, and global demand combined with supply limitations and logistics problems, have led to consumer prices increasing at a fast pace in several areas. In the near term, the Riksbank’s inflation forecast has been revised up, primarily because electricity prices have risen unexpectedly sharply. Swedish inflation, which has been fairly close to the inflation target of 2 per cent in recent months, is assessed to become higher than 2 per cent in the coming year, before falling back again. Underlying inflation, which shows more of a trend, is lower and it will take a couple years more before CPIF inflation is assessed to be more permanently close to 2 per cent.

The expansionary monetary policy is a prerequisite for inflation to also be close to the target in the slightly longer run. The Executive Board has therefore decided to keep the repo rate at zero per cent. It is expected to remain at zero per cent for the entire forecast period, which stretches until the third quarter of 2024. The Riksbank will also continue to purchase securities in 2021 in line with earlier decisions and the Executive Board's forecast is that the holdings will be more or less unchanged in 2022.