Minutes of the Executive Board’s monetary policy meeting on 19 April 2011
At its monetary policy meeting on 19 April, the Executive Board of the Riksbank decided to raise the repo rate by 0.25 percentage points to 1.75 per cent. The assessment of the Executive Board was that there is a need to raise the repo rate in order to stabilise inflation close to the target of 2 per cent and to avoid too high a level of resource utilisation in the future. The forecast for the repo rate (the repo rate path) was held unchanged in relation to the February Monetary Policy Report. One important condition for not adjusting the repo-rate path upwards is that the currently high CPI inflation does not make a more significant impact on various agents' long-term inflation expectations and on wage formation.
The decision was made against the background of the monetary policy discussion. The conclusions of the discussion are that the Swedish economy remains strong and the labour market is continuing to improve steadily. Underlying inflation is still low, but is expected to rise as resource utilisation increases and wages rise at a faster pace. At the same time, CPI inflation is high at present as a result of rising mortgage rates. This effect is expected to be transitory. Growth in the world as a whole also remains high, despite the natural disasters in Japan and the political unease in North Africa and the Middle East. Developments in Asia are particularly strong, but Europe and the United States are also continuing their recoveries. The strong developments in Asia and unease in the oil-producing countries are leading to an increase in energy and commodity prices.
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 of a percentage point to 1.75 per cent and against the repo rate path in the Monetary Policy Update.
You can read the full minutes of the monetary policy meeting held on 19 April in the attached PDF file.
