Monetary Policy Report, February 2023

Inflation is far too high and has continued to rise. For inflation to fall and stabilise around the target within a reasonable time, the Executive Board has decided to raise the Riksbank's policy rate by 0.5 percentage points to 3.0 per cent. The policy rate will probably be raised further during the spring. Further, the Executive Board decided that the Riksbank will, with effect from April, sell government bonds to reduce asset holdings at a faster pace.

What is the policy rate?

Policy rate

Applies from 15 February 2023

Policy rate, table

The monetary policy decision including the policy rate

In brief - Monetary policy February 2023

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High inflation creates problems in the economy. To bring down inflation and safeguard the inflation target, the Executive Board assesses that monetary policy needs to be tightened further. The Executive Board has therefore decided to raise the Riksbank’s policy rate by 0.5 percentage points, to 3.0 per cent. The forecast for the policy rate indicates that it will probably be raised further during the spring. As complementary measures to the higher policy rate, the Executive Board has also decided to reduce the Riksbank's asset holdings at a more rapid pace, by selling government bonds and offering larger volumes of Riksbank Certificates in the weekly monetary policy operations.

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Swedish inflation is very high. CPIF inflation rose to just over 10 per cent in December. Even disregarding the rapidly increasing energy prices, inflation was high and still rising. It is important for confidence in the inflation target that inflation falls back clearly this year and there are many indications that it will do so. But it is uncertain whether inflation will fall sufficiently quickly and far enough, not least given the fact that underlying inflation is still rising. Moreover, if the krona continues to be weak, it will be considerably more difficult for the Riksbank to return inflation to the target more permanently.

Policy rate and 3.0

Although a tighter monetary policy means that economic activity will weaken further in the near term, achieving low and stable inflation within a reasonable period of time is a prerequisite for good growth in the Swedish economy. If inflation is persistently high, the negative consequences for Swedish growth and the labour market will be much greater in the long run. Tightening monetary policy more now reduces the risk of even more serious problems with inflation and greater monetary policy tightening further ahead, with more widespread negative consequences for the Swedish economy.

What is the forecast for the policy rate?

The press release and the Monetary Policy Report contain the Riksbank's forecast for the policy rate.

Related documents

Next monetary policy decision?

The Executive Board holds 5 scheduled monetary policy meetings a year. The next monetary policy meeting will take place on 25 April 2023 and information on the monetary policy decision, including the policy rate, will be communicated the day after, 26 April 2023

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Updated 09/02/2023