The Riksbank’s Annual Report 2005

The Riksbank presented its Annual Report for 2005 to the Riksdag, the Swedish parliament, today. The Riksbank reported a profit of SEK 3.3 billion. The profit is primarily attributable to interest income from the foreign currency reserve’s bond holdings. The Annual Report includes an account of the monetary policy during 2003-2005. This shows that inflation in 2004 and 2005 has remained below the target of 2 per cent. The main reasons for this are that import prices have fallen more than expected and that productivity growth has been higher than predicted. The Annual Report describes the changes that have occurred regarding the Riksbank’s role in the cash management process during the period 1998-2005. The view of the Riksbank is that this restructuring process has cost just over SEK 500 million more than if the activities during the period 1999-2004 had continued to be managed in the same way as before and subsequently wound up. The change has led to a new, more rational structure for cash management seen from an economic perspective. The Riksbank’s earnings over the past five years can be found in the enclosed pdf-file.