Ingves and af Jochnick: Hearing on monetary policy
Date
07/03/2013
On Thursday Governor Stefan Ingves and First Deputy Governor Kerstin af Jochnick took part in the year's first hearing on monetary policy at the Riksdag Committee on Finance.
Mr Ingves began the hearing by describing the monetary policy conducted over the past year. Growth in the Swedish economy is now weak and inflationary pressures are low. Since last winter the Riksbank has therefore halved the level of the repo rate, from 2 to 1 per cent, to stimulate the Swedish economy so that inflation rises towards the target of 2 per cent. Mr Ingves also said that monetary policy cannot disregard the high indebtedness among Swedish households as it creates the risk of major economic problems in the long run, for instance in the form of a sharp rise in unemployment.
Ms af Jochnick pointed out that, by holding the repo rate at a low level, the Riksbank was contributing to ensuring that inflation attains the target and to a recovery in the labour market. At the same time, there are signs of structural problems on the labour market. Monetary policy thus had limited opportunity to push down unemployment permanently to much lower levels. Furthermore, Ms af Jochnick considered that there were good grounds for discussing household indebtedness, as the risks are substantial. But she also said that the new policy area of macroprudential supervision can offer sharper tools than the interest rate to manage them.
Follow the link to see the Powerpoint presentations to the Riksdag Committee on Finance.
The Governor of the Riksbank and one of the deputy governors attend hearings on monetary policy at the Riksdag Committee on Finance three times a year.
