Evaluation of monetary policy
The Riksbank builds up confidence in its work by enabling democratic insight. This means that we openly and clearly report our analyses and decisions in reports, speeches and press releases, for instance. Twice a year, the Riksdag (the Swedish parliament) examines the monetary policy conducted on the basis of the material published by the Riksbank.
The Riksdag examines monetary policy
The Riksbank is accountable to the Riksdag. Twice a year, the Riksdag Committee on Finance examines the monetary policy conducted. Prior to the Riksdag's evaluation in the spring, the Riksbank compiles the report Account of Monetary Policy. This describes how inflation and the real economy have developed over the past year. In the autumn, the Monetary Policy Report is used as a basis for the Riksdag's evaluation.
The importance of openness and clarity
For the Riksbank to maintain a good level of confidence in its work and in the inflation target, there must be understanding in society of the functions of the Riksbank and a broad political support for the monetary policy conducted. If the Riksbank is open and clear, then monetary policy is easier to predict. The general public can more be easily be sure that the monetary policy decisions made are really aimed at achieving low and stable inflation. This increases the credibility of the inflation target and makes it easier to anchor inflation expectations among the general public and economic agents. If economic agents can rely on inflation being close to the target, companies will not need to change their prices if costs rise temporarily. In the same way, stable inflation expectations can result in moderate wage increases.
The Riksbank's considerations when making monetary policy decisions
As part of its work on openness, the Riksbank publishes the forecasts and assessments on which monetary policy is based. In connection with its monetary policy meetings the Riksbank publishes a Monetary Policy Report containing forecasts for the economic outlook and inflation prospects based on the repo-rate path that the majority of Executive Board members consider to represent a well-balanced monetary policy at that point in time. The day after a monetary policy meeting, the Riksbank issues a press release about the monetary policy decision, which also contains information on how the individual Board members voted and the motives for any reservations entered. Around two weeks after the meeting, the Riksbank publishes minutes from the meeting, which show the various members' reasoning.
Communication between the meetings
Between the meetings the Riksbank can communicate with the aid of speeches, press releases and economic commentaries on the website. The members of the Executive Board often hold speeches in which they justify their stances at the most recent monetary policy meeting in greater detail. They can also comment in speeches on new statistics and relate them to the earlier forecasts made or describe which variables were particularly important when making the decision. But the members cannot provide information that would anticipate their decisions at the next monetary policy meeting.