af Jochnick: A springboard for the monetary policy meeting in September
First Deputy Governor Kerstin af Jochnick held a speech at Danske bank in Stockholm on Tuesday, in which she described the motives behind the repo-rate decision in July and summarised economic developments over the summer. Ms af Jochnick noted that the unease in Europe remained. Developments abroad during the summer had possibly been somewhat weaker than expected, while developments in Sweden, at least during the second quarter, had been unexpectedly strong. The krona has strengthened more during the summer than the Riksbank expected in July. “What we now have to consider is how these factors should be balanced against one another. Our conclusions on this matter will be presented at the beginning of September,” concluded Ms af Jochnick.
Ms af Jochnick began with a quick run-through of the assessment of economic developments described by the Riksbank in the July Monetary Policy Report. Concern over the crisis in the euro area had increased at that point and there was considerable uncertainty over future developments. At the same time, the Swedish economy had been stronger than expected at the beginning of the year. The overall assessment in July was that the effects of the increased financial unease would nevertheless have a dampening effect on the Swedish economy. The Riksbank's assessment was that the repo rate needed to remain at a low level to support economic activity and attain an inflation rate in line with the target of 2 per cent.
Ms af Jochnick then summarised what had happened in the economic arena during the summer. Much of this concerned crisis management in the euro area, and Ms af Jochnick noted that there was still unease regarding Europe and that developments abroad had remained weak. At the same time, the Swedish economy has continued to be relatively strong. Another significant factor is that the krona has strengthened.
You can read the entire speech in the PDF file.
