Minutes of the Monetary Policy Meeting held on 8 february 2023

Inflation is far too high and has continued to rise. For inflation to fall and stabilise around the target within a reasonable time, the Executive Board has decided to raise the Riksbank's policy rate by 0.5 percentage points to 3.0 per cent. The Executive Board has also decided that the Riksbank shall sell government bonds as from April to reduce the asset holdings at a faster rate and to offer larger volumes of Riksbank Certificates in the weekly monetary policy operations.

Globally, inflation remains high and central banks have increased their policy rates to bring it down. Swedish inflation was far above target in December and the board members emphasised in particular that underlying inflation continues to rise and that there is still no clear turning point in sight. There are many indications that inflation will fall back this year but there is considerable uncertainty and the members discussed whether it will fall sufficiently quickly and far enough. They also highlighted the krona’s trend depreciation and that the weak krona is making it more difficult for the Riksbank to bring inflation back towards the target. The members emphasised the Riksbank’s mandate of maintaining permanently low and stable inflation. Tightening monetary policy more now reduces the risk of inflation becoming entrenched and creating more serious problems for the real economy.

High confidence in the inflation target among economic agents is therefore essential for strong economic development. The members noted that long-term inflation expectations remain stable close to 2 per cent and that the signals from the ongoing wage bargaining round are that the inflation target is the starting point of the present wage negotiations.

In light of the high and rising inflation, the members agreed that monetary policy needs to be tightened further for inflation to fall back to target within a reasonable time. All members supported the decision to increase the policy rate by 0.5 percentage points to 3.0 per cent, to reduce the asset holdings more rapidly by selling government bonds and to offer larger volumes of Riksbank Certificates. All members also supported the forecast indicating that the policy rate will probably be increased further during the spring.

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