Press release Inflation is approaching the target at the same time as the economy is weak. The Riksbank can therefore ease monetary policy. The executive board has decided to lower the key interest rate by 0.25 percentage points to 3.75 percent. If the inflation outlook holds, the policy rate may be lowered twice more in the second half of the year.
Monetary policy and diminishing supply disturbances have contributed to the fact that inflation has fallen and is now close to the target. In March, CPIF inflation was 2.2 percent, excluding energy prices, inflation was 2.9 percent. The results were lower than the Riksbank’s latest forecast.
Information that has been added since the monetary policy report in March strengthens the picture of inflation close to the target even in the slightly longer term. Inflation expectations are well anchored and wage increases moderate.
When inflation approaches the target at the same time as the economy is weak, monetary policy can be eased. The Executive Board has therefore decided to lower the key interest rate by 0.25 percentage points to 3.75 percent. If the inflation outlook holds, the policy rate may be lowered twice more in the second half of the year, in line with the forecast in March.
But the inflation outlook is uncertain. There is uncertainty on both the upside and the downside as inflation now falls from very high levels. The risks that could cause inflation in Sweden to rise again are mainly linked to the strong American economy, the geopolitical unrest and the exchange rate of the krona. The adjustment of monetary policy going forward should therefore be characterized by caution, with gradual reductions in the key interest rate.
The decision on the key interest rate applies from 15 May. The minutes from the executive board’s monetary policy meeting will be published on 15 May. A press meeting with Riksbank governor Erik Thedéen and Åsa Olli Segendorf, head of the department for monetary policy, will be held today at 11:00 at the Riksbank. To participate, a press ID or equivalent is required. The press conference is broadcast live on riksbank.se.
About Monetary policy update
In connection with the announcement, a Monetary Policy Update is published which contains the Executive Board’s assessment of how new information affects the economic outlook and monetary policy. There are no new forecasts in the update. The next monetary policy report with forecasts will be published on 27 June.
Contact: Press service 08-787 02 00
Updated 2024-05-08
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