Executive Board in open hearing on monetary policy
News, Presentation On Tuesday, the Executive Board took part in an open hearing at the Riksdag (Parliamentary) Committee on Finance about current monetary policy. Governor Erik Thedéen began by presenting the most recent interest rate decision, when the policy rate was cut from 2 to 1.75 per cent – the eighth cut in just over a year.
“While inflation is slightly elevated, monetary policy is forward-looking. As we feel more confident that inflation is coming back down, we cut the interest rate to provide further support to economic activity and stabilise inflation in the medium term,” Mr Thedéen explained.
The economic recovery has been repeatedly postponed, but several factors favour an acceleration in growth. Lower interest costs, rising real wages and increased disposable income create the conditions for stronger economic activity. More recently, there have also been signs that growth is on slightly firmer ground: consumption is rising and business output is increasing. However, Erik Thedéen noted that unemployment is still high.
“Our assessment is that interest rates will remain at this level for some time. But if developments are different from what we see ahead of us, we will adjust our monetary policy.”
He also emphasised the importance of safeguarding the fiscal policy framework.
“It is important for confidence in the framework that public net lending is strengthened in the years ahead.”