Minutes of the Monetary Policy Meeting held on 9 February 2022
Press release, Minutes Monetary policy needs to give continued support for inflation to be close to the inflation target in the medium term. At its monetary policy meeting on 9 February, the Executive Board of the Riksbank therefore decided to keep the repo rate unchanged at zero per cent, and to purchase bonds for SEK 37 billion during the second quarter of 2022 to compensate for maturing assets in the Riksbank's holdings.
The global economy has largely recovered the substantial fall in GDP that took place at the beginning of the coronavirus pandemic, and growth prospects are good, both in Sweden and abroad. Globally, inflation has risen rapidly over the past year, and the Executive Board members pointed out that this was largely due to a surprisingly rapid increase in energy prices. They also emphasised that there is considerable disparity among different countries in measures of inflation that exclude energy prices. Compared with the United States, for example, where inflation excluding energy has also risen substantially, Swedish inflationary pressures are still moderate, it was noted. Several members pointed out that different measures of underlying inflation in Sweden are unusually volatile at the moment, and therefore give no clear picture of the trend in price growth. However, it was also noted that there does not appear to have been any broad upturn in inflationary pressures so far. In this context, the Board members pointed out that long-term inflation expectations are close to 2 per cent.
The inflation forecast has been revised up, but CPIF inflation is projected to fall back over the year, as energy prices are not expected to continue to increase. The members discussed the uncertainty regarding the development of inflation and several said that it has increased, not least as a result of the unusually large fluctuations in inflation. The views of Board members differed regarding the risks related to the inflation forecast and whether it is the risk of higher or lower inflation than in the Riksbank's main scenario that is most prominent.
All members supported the decision to keep the repo rate unchanged at zero per cent and the forecast for the repo rate, which indicates that the rate will be raised during the second half of 2024. The new forecast implies that the timing of a first rate increase has been brought forward slightly, in relation to the assessment in November. Some differing opinions were also expressed as regards an appropriate time for a first rate rise. Three Board members entered reservations against the decision on, and forecast for, asset purchases. They instead advocated smaller asset purchases during the second quarter and that purchases will then be gradually tapered during the second half of the year.