Minutes of the Monetary Policy Meeting held on 12 February 2019

At the Monetary Policy Meeting on 12 February 2019, the Executive Board of the Riksbank decided to hold the repo rate unchanged at –0.25 per cent. As in December, the forecast for the repo rate indicates that the next increase will be during the second half of 2019, provided that the economic outlook and inflation prospects are as expected.

The Executive Board supported the picture of the economic outlook and inflation prospects described in the draft Monetary Policy Report. Economic developments have, as expected, entered a calmer phase both in Sweden and abroad. But although growth is slowing down, economic activity is still expected to be good in the coming years.

All of the board members stated that the data received since the Monetary Policy Report in December has not led to any major revisions of the Swedish economic outlook and inflation prospects. Although there are a number of mixed signals, the picture of strong Swedish economic activity remains and the conditions for inflation remaining close to 2 per cent in the coming years have not changed to any great extent. Therefore, the Executive Board considered it appropriate to hold the repo rate unchanged at
–0.25 per cent. As in December, the forecast for the repo rate indicates that the next increase will be during the second half of 2019.

At the same time, several board members pointed out that there is great uncertainty over future growth conditions. Risks that cannot be captured in a simple manner in the forecast include the trade conflict between the United States and China, the uncertainty regarding economic activity in Europe and the United Kingdom's withdrawal from the EU. With regard to the uncertainty over demand in the Swedish economy, there was particular emphasis on developments in the housing market and some board members also discussed the recent depreciation of the krona. Given these uncertainty factors, the importance of monetary policy proceeding cautiously and of future rate increases being adapted to the outlook for the economy and inflation was underlined.

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