Stefan Ingves: A changing payment market and the Riksbank’s operational framework

The Riksbank is currently reviewing how the monetary policy operational framework could be developed so that it continues to be an effective tool for achieving the price stability objective. “We are currently looking at how we can design a robust, transparent and automated monetary policy operational framework that can continue to steer market rates in an effective way”, Stefan Ingves said today when he spoke at a conference at the International Capital Markets Association in Stockholm.

Date: 16/05/2019 12:45

Speaker: Governor Stefan Ingves

Place: ICMA – International Capital Market Association

One of the Riksbank’s main tasks is price stability, in other words, low and stable inflation. By raising or cutting the Riksbank’s policy rate, the Riksbank affects other interest rates in Sweden, which in turn affect demand in the Swedish economy and thereby inflation. To keep market rates close to the Riksbank’s policy rate, the Riksbank has a monetary policy operational framework.

The Riksbank’s monetary policy operational framework is strongly linked to the Riksbank’s payment system, RIX. Today, the demand for instant, round-the-clock payments is on the increase, and the Riksbank’s payment system needs to be modernised to meet the requirements for speed and accessibility. As the Riksbank’s operational framework is interconnected with the payment system, the Riksbank also needs to consider how the framework can be modified in order to be sufficiently robust and flexible to be able to meet the challenges of a changing payment market. ”We intend to return to this question with further information on our reasoning in the coming months,” said Mr Ingves.

Updated 16/05/2019