Minutes of the Monetary Policy Meeting held on 27 April 2022

Press release, Minutes The Riksbank needs to conduct monetary policy to counteract the high inflation becoming entrenched in price- and wage-setting, and ensure that inflation returns to the target after a time. At its monetary policy meeting on 27 April, the Executive Board of the Riksbank therefore decided to raise the repo rate from zero to 0.25 per cent and to reduce the pace of the Riksbank’s asset purchases during the second half of this year so that the holdings decline.

The global economy is still affected by the major shock caused by the pandemic and on top of this come the consequences of Russia’s invasion of Ukraine. The members noted that inflation has risen rapidly, both abroad and in Sweden. They pointed out that the upturn in the rate of price increase in Sweden is now broad-based, and not merely driven by rapidly rising energy prices. Even excluding energy prices, inflation is at the highest level since the early 1990s. Several members pointed to the large upward revision in the forecast for inflation and that inflation is assessed to remain high for some time further. They also emphasised the risks arising from the high inflation. The Board members were unanimous that monetary policy needs to act to prevent the high inflation being perceived as persistent and thereby having an impact on inflation expectations and price- and wage-setting. All of the members supported the decision to raise the repo rate from zero to 0.25 per cent and to reduce the pace of the Riksbank’s asset purchases.

The forecast for the repo rate implies that it will be raised a further two to three times this year and will be slightly below 2 per cent at the end of the three-year forecast period. The members pointed out that the uncertainty regarding inflation and growth prospects both in Sweden and abroad is now unusually large. However, at the same time, all of the members emphasised that they would be prepared to raise the policy rate quickly if it were necessary to ensure inflation is returned to the target within a reasonable time perspective.

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Updated 06/05/2022