How much money is there in the economy?
The amount of money increases over time, partly because things become more expensive and partly because the economy grows. There are more of us buying more things for every passing year, creating a need for more and more money.
The Riksbank’s task is to ensure that there is always enough central bank money to meet demand. This is a question of both the amount of notes and coins required in society and how much central bank money banks need to borrow from the Riksbank in the RIX system. When the Riksbank carries out what are known as market operations, the amount of central bank money can increase or decrease (read more about monetary policy instruments here). The banks also add new money, private bank money, to the financial system when they issue new loans.
But there is no particular target for how much money there should be in the economy. Instead, we in Sweden have an inflation target of 2 per cent to ensure that money retains a stable value. To achieve this target, the Riksbank raises or lowers its policy rate (the repo rate). This rate is the price of money, so by raising or lowering it, we affect the demand for money in the economy.
Statistics on the volume of money
In Sweden, it is Statistics Sweden that calculates the volume of money on behalf of the Riksbank. The volume of money means the amount of liquid funds circulating in the economy. There are different ways of measuring the volume of money, depending on what is included in the definition of money. Common measures of the volume of money are:
- Banknotes and coins held by the general public (previously known as M0).
- M1: Banknotes and coins held by the general public, plus demand deposits (that is, money in current accounts and savings accounts) with Swedish monetary financial institutions, MFIs, (including banks, mortgage institutions and financial institutions) and the Swedish National Debt Office.
- M2: M1 plus deposits with certain terms and conditions in Swedish monetary financial institutions and the Swedish National Debt Office, from the Swedish general public.
- M3: Corresponds to M2 plus repos (excluding central counterparties), shares n money market funds and fixed-income securities with a maturity of up to and including 2 years issued by Swedish monetary financial institutions and held by the general public.
Statistics Sweden's publication Financial Market Statistics on scb.se contains further information on the volume of money and definitions of the measures of the volume of money.
How many banknotes and coins are there?
For statistics on the volume of banknotes and coins in the economy, read more on the page Statistics on notes and coins.
Statistics on payments in RIX
For statistics on payments in the RIX system, you can read more on the page Statistics on payment in RIX.
How much private bank money is there?
For statistics on the volume of private bank money, you can read more on Statistics Sweden's website. Statistics Sweden produces statistics on assets and liabilities for Swedish monetary financial institutions, MFIs (including banks, mortgage institutions and financial institutions).