Ingves at the Riksdag Committee on Finance. Hearing on monetary policy
Today, Governor Stefan Ingves and First Deputy Governor Kerstin af Jochnick take part in the year's third hearing on monetary policy at the Riksdag Committee on Finance.
"It is a challenge in Sweden to maintain both inflation and growth higher than the European average. But so far we are well on the way to achieving this", Mr Ingves notes in his introductory comments to the hearing. The expansionary monetary policy in Sweden and other countries is necessary in order to stimulate economic growth and counteract the risks of excessively low inflation, continues Mr Ingves. But he points out at the same time that the generally low interest rates are also incentivising greater risk-taking in the economy as well as contributing to highly valued assets and increased indebtedness. "Targeted measures in macroprudential policy, housing policy and tax policy are of the utmost urgency so as not to jeopardise stability in the Swedish economy", Mr Ingves emphasises.
"We must not forget the central role played by the inflation target in the economy", says Ms af Jochnick. In her presentation, she points not only to inflation being lower and more stable since the introduction of the inflation target but also to the fact that Swedes have acquired greater purchasing power and had more stable wage development. "The inflation target is a cornerstone of economic policy that is worth defending". She shows how the Riksbank's monetary policy, with a negative repo rate and the purchases of government bonds, has had the intended effect. Inflation expectations have risen and the strong economic development in Sweden indicate that inflation will increase in the period ahead.
