Minutes of the Monetary Policy Meeting held on 24 November

Monetary policy needs to give continued support to the economy for inflation to be close to the inflation target in the slightly longer term. At its monetary policy meeting on 24 November, the Executive Board of the Riksbank therefore decided to hold the repo rate unchanged at zero per cent, and to purchase bonds during the first quarter of 2022 to compensate for forthcoming principal payments in the Riksbank's asset holdings.

The board members noted that economic activity is strong, and that the substantial fluctuations in global demand have resulted in bottlenecks in production. They have also led to large price rises regarding commodities and transport, and to rapidly rising producer prices. Consumer prices have risen in most countries, but the Executive Board members noted that there are clear differences between developments in different countries. The United States, for example, has, seen a broader upturn in prices, while in the euro area and Sweden, the inflation upturn has been primarily driven by rapidly rising energy prices.

The members discussed the driving forces behind higher inflation, and whether the higher rate of inflation could be assumed to be temporary or more lasting. They noted that the forecast is for CPIF inflation to fall back to a fairly low level next year, when the contribution from energy prices declines, and the balance between demand and supply conditions improves. For inflation to be persistently close to the target, a more sustained upturn in cost pressures is required. Financial conditions therefore need to remain expansionary.

All of the members supported the decision to retain the repo rate unchanged at zero per cent and to purchase bonds during the first quarter to compensate for principal payments. The forecast for the repo rate indicates that it will be raised in the latter part of 2024, and the forecast for the asset holdings is that they will remain more or less unchanged in 2022, after which they will gradually decline. Some members expressed different nuances regarding the asset holdings and considered that it might become appropriate for the purchases to be tapered further next year.

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