Minutes of the Monetary Policy Meeting held on 20 September 2021

At the monetary policy meeting on 20 September, the Executive Board of the Riksbank decided to hold the repo rate unchanged at zero per cent and the assessment was that the repo rate will remain at this level over the coming three-year period. The Riksbank will continue to purchase securities during the remainder of 2021 in line with earlier decisions and the Executive Board's forecast is that the holdings will be more or less unchanged in 2022. The Executive Board also decided to now close certain lending facilities that were launched during the pandemic and to restore at the turn of the year the requirements for the collateral the banks have to provide when borrowing from the Riksbank.

The global recovery has continued at a rapid pace. Although the risk of new setbacks as a result of the pandemic remains, GDP growth is high both in Sweden and abroad.

The members noted that inflation had been unexpectedly high in recent months but that this was largely due to rapidly rising energy prices. The inflation forecast for the coming year has been revised upwards significantly and CPIF inflation will exceed 2 per cent in the coming year. However, temporary effects are continuing to affect inflation, and the members pointed out that monetary policy needs to look through them. CPIF inflation is expected to fall back next year, and a continued expansionary monetary policy is a necessary condition for inflation to be more lastingly close to the inflation target. The picture of inflationary pressures in the slightly longer run remains unchanged, and several members pointed to the risk of withdrawing monetary policy stimulation too early. They pointed out that inflation has in recent decades on average been too low, and that an inflation temporarily higher than 2 per cent could contribute to further anchoring expectations of prices and wages in line with the target.

All of the board members supported the decision to hold the repo rate unchanged and the forecast implying an unchanged repo rate until the third quarter of 2024. A few members discussed a rate path that could indicate a rate rise at the end of the forecast period. The Executive Board decided to close some lending facilities that were launched during the pandemic and to reintroduce the previously applicable collateral requirements the banks have to meet when borrowing from the Riksbank. These measures were implemented during an acute phase of the crisis to guarantee access to liquidity in the financial system, but for some time the demand for them has been low.

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