Minutes of the Monetary Policy Meeting held on 24 April 2019

At the Monetary Policy Meeting on 24 April 2019, the Executive Board of the Riksbank decided to hold the repo rate unchanged at –0.25 per cent. The Executive Board assesses that the repo rate will remain at this level for a somewhat longer period of time than was forecast in February. The Executive Board has also decided that the Riksbank will purchase government bonds for a nominal value of SEK 45 billion from July 2019 to December 2020.

The members supported the picture of the economic outlook and inflation prospects described in the draft Monetary Policy Report. The good global economic activity is continuing but as expected has entered a phase of softer growth. Activity in the Swedish economy is high and inflation is close to the target of 2 per cent.

However, several members noted that the global economy is still fraught with uncertainty and risks that can lead to poorer development going forward. They also noted that several major central banks are now communicating a somewhat more expansionary monetary policy than previously. As for Sweden, economic activity has developed according to forecast. But, at the same time, the members emphasised that inflation has been lower than expected for several months in a row. This raises questions about the strength of inflationary pressures and the inflation forecast has been revised downwards compared with the assessment published in February.

The Executive Board agreed to hold the repo rate unchanged at –0.25 per cent. Even if the development of inflation, according to the members, does not require a completely different monetary policy, it is their assessment that the weaker inflation prospects provide reason to wait slightly longer before the repo rate is raised again. Minor differences in opinion were expressed regarding when it might be appropriate to increase the rate next time but the forecast for the repo rate path indicates that it will raised at the end of the year or at the beginning of next year. In light of the unexpectedly low inflation both in Sweden and abroad, low interest rates abroad and uncertainty over the strength of global developments, several members pointed out the importance of monetary policy proceeding cautiously. The forecast therefore indicates that rate hikes in the period ahead will occur at a somewhat slower pace than in the previous forecast. The majority of the members also considered it appropriate to maintain the level of the Riksbank’s holdings of government bonds and therefore to buy government bonds at a nominal amount of SEK 45 billion from July 2019 to December 2020.

Deputy Governors Martin Flodén and Henry Ohlsson entered reservations against the decision to purchase government bonds from July 2019 to December 2020. They consider that further purchases will not contribute to attaining monetary policy targets in a clear way, but that there are risks associated with additional purchases.

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