Minutes of the Executive Board’s monetary policy meeting on 14 December 2010
At its monetary policy meeting on 14 December, the Executive Board of the Riksbank decided to raise the repo rate by 0.25 percentage points to 1.25 per cent. The Executive Board’s assessment was that the repo rate gradually needs to be raised in order to stabilise inflation close to the Riksbank’s target of 2 per cent and to avoid too high a level of resource utilisation in the Swedish economy. A gradual rise in the repo rate can also contribute to slower growth in household borrowing and reduce the risk of imbalances building up.
A summary of the monetary policy discussion is that the Swedish economy is growing at a record rate. Growth has been higher than expected this year, and the labour market is steadily improving. Higher electricity and commodity prices are temporarily pushing up inflation, but underlying inflationary pressures are currently low. These are expected to increase as economic activity improves. While the recovery is also continuing in many regions of the world, developments are uncertain in Europe, for instance, as a result of concern over fiscal problems. The outlook in the United States has improved, however, while there is still uncertainty regarding the housing market and the labour market continues to be weak.
Deputy Governor Karolina Ekholm and Deputy Governor Lars E.O. Svensson entered a reservation against the decision to raise the repo rate by 0.25 percentage points to 1.25 per cent and against the forecast repo rate (the repo rate path) in the Monetary Policy Update.
You can read the full minutes of the monetary policy meeting held on 14 December in the attached PDF file.
