Minutes of the Executive Board’s monetary policy meeting on 15 December 2009
The recovery in the economy is continuing and inflationary pressure will be low in the coming period. To attain the inflation target of 2 per cent and to support the economic recovery, the Executive Board of the Riksbank decided at the monetary policy meeting held on 15 December to hold the repo rate unchanged at 0.25 per cent. The forecast for the repo rate was also held unchanged.
Deputy Governor Lars E.O. Svensson entered a reservation against the decision and advocated cutting the repo rate to 0 per cent and a repo rate path 0.25 per cent below that in the main scenario until the end of the third quarter of 2010. Mr Svensson asserted that such a repo rate path entails a better-balanced monetary policy, with lower unemployment, higher resource utilisation and a CPIF inflation rate closer to the target, without causing any problems to the functioning of the financial markets or to financial stability.
Deputy Governors Lars Nyberg and Barbro Wickman-Parak supported the decision to hold the repo rate unchanged at 0.25 per cent, but entered reservations against the repo rate path in the Monetary Policy Update. Their stance was motivated with reference to a slightly more positive view of growth prospects and the fact that economic activity is now beginning to normalise. They considered that it would be necessary to raise the interest rate sooner than indicated by the proposed repo rate path, but that the path would then not need to be so steep during the remaining forecast period.
You can read the full minutes of the monetary policy meeting held on 15 December in the attached PDF file.
