Erik Thedéen: Inflation is close to target, monetary policy is being adjusted with caution
“Cutting the policy rate was an important step. Following a period with substantial global price impulses, price growth in Sweden of around 10 per cent and considerable uncertainty over inflation prospects, we are now back in a situation where inflation is close to the target of 2 per cent and where the prospects for continued low inflation are favourable. That's why we were able to start easing monetary policy.” These were the words of Governor Erik Thedéen when he spoke today about the economic situation and current monetary policy at the Legal, Financial and Administrative Services Agency’s capital market day in Stockholm.
Date: 17/05/2024 09:00
Speaker: Governor Erik Thedéen
Place: The Royal Armoury, Slottsbacken 4 - Stockholm
Erik Thedéen, governor.
“This week's inflation outcome for April confirms the picture of inflation in Sweden being close to target. If the outlook for inflation holds, the rate could be cut two more times during the second half of the year."
But Mr Thedéen emphasised that the adjustment of monetary policy needs to be characterised by caution and that the Riksbank needs to continuously evaluate the effects of the rate cuts that have now begun.
“When assessing the inflation outlook, we also need to consider international economic developments, which affect the Swedish economy via several different channels, including the exchange rate. But, as I have pointed out earlier, it is inflationary pressures and the outlook for inflation here in Sweden that are the decisive factors in our decisions.”