Chat with Stefan Ingves 21 December 2016

Thank you so much for all of your questions. A Merry Christmas and a Happy New Year to you all. There will be new chats in 2017. Stefan Ingves

Hi Stefan, the Riksbank's forecast indicates a repo rate of -0.60% during 2017, What must happen so that you do not cut the rate in 2017? Patric (13:33)

 
Answer: That our forecast proves to be correct.

Hi Stefan, Inflation in Sweden is rising right now, do you think it is rising too slowly? Patric (13:36)

 
Answer: We make the best forecast that we can. Given this, if our forecast is correct, then inflation will rise gradually at a reasonable pace.

Hi Stefan, Do you at the Riksbank get Statistics Sweden's CPI statistics before the rest of us? Magnus (13:37)

 
Answer: No we receive all such data at the same time as everyone else.

Hi Stefan, How far is it technically possible to cut the repo rate? Lars (13:40)

 
Answer: Technically, there are no limits, what we then choose to do is quite different. We are satisfied with -0.50 per cent right now. (Unfortunately we have some technical problems at the moment so the replies are being uploaded rather slowly)

Hi Stefan, Why are you waiting to cut the repo rate to -0.60% as shown in your forecast? Magnus (13:42)

 
Answer: The repo-rate path is an assessment of how we see interest rate-setting in the future and at present there is no need to cut the rate further.

Hi Stefan, How much do the banks have to pay for the negative interest rate and what do you think will happen with regard to financial stability if they charge these costs to their customers? Patric (13:47)

 
Answer: The amount of money the banks pay is governed by two factors, firstly how much money one needs to deposit into the Riksbank's account and secondly how much one has to pay to do this. At present, the total cost is around SEK 2 billion a year, but on the other hand the banks earn around SEK 100 billion a year so in this context the negative interest rate is a limited amount.

Hi Stefan, The repo rate was introduced in 1994, what was it called before that and what difference is there apart from the name? Patric (13:49)

 
Answer: Before one used to talk a lot about the Riksbank's Discount, a large number of loan contracts and other contracts too were directly tied to the Discount.

Hi Stefan, Is there any other central bank that has a lower policy rate than the Riksbank? Fredrik (13:52)

 
Answer: Yes, there is, but at the same time it is difficult to compare negative interest rates as everyone uses different system to calculate the negative interest rate.

How much will the Swedish economy be affected when Donald Trump becomes president in 2017? Derin (13:57)

 
Answer: That is very difficult to say. If large investments are made in the US infrastructure, for instance, this could increase global demand and have a positive effect on Sweden, but on the other hand if new trade barriers are erected this could have a negative effect for us. At present it is very difficult to know what the net result will be.

Hi Stefan, I saw you on TV at the Nobel festivities, did you have a nice time and how many of these galas have you attended? Merry Christmas and Happy New Year! Patric (13:59)

 
Answer: Yes, I had a nice time, thank you, and it is particularly nice for our international guests who have never experienced anything like this.