The negative inflationsnyheterna do that maybe it is not enough for the Riksbank to increase its bond purchases, but the repo rate may need to be lowered again.
It said the deputy governor Per Jansson at the monetary policy meeting on april 26, according to the minutes of the meeting published on Wednesday.
He asked himself if it with a lower inflation than expected and a prognosförslag with worse inflation outlook in the coming years is enough to ease monetary policy just by expanding statsobligationsköpen and delaying the first interest rate hike next year.
”Even with these monetary policy changes is the inflation forecast in the draft monetary policy report still lower than in the past… especially as the repo-rate path already in the initial position is situated a little bit below the current level of the repo rate,” he said.
”At this point to carry out a further lowering of the repo rate is of course quite possible, and reasonably might the inflation picture, then come to see better”, continued Per Jansson.
He, however, concluded that there currently may be wise to rest on laurels when it comes to further interest rate cuts, because the space that the Riksbank to lower the interest rate ”is not infinitely large and it can be important to save on the powder”.
He noted that the inflation picture has deteriorated somewhat since the February meeting and warned that inflation expectations may start to fall through if the outcomes for inflation continues to be unexpectedly low.
Per Jansson noted that the upturn in economic activity abroad is continuing, but found that there is considerable uncertainty about the economic and political development.
”Many risks are difficult to siffersätta in a forecast but, if they do occur they may give rise to dramatic consequences and create a completely new location,” he said.
He thought at the same time to the speculation that the ECB is about to tighten its monetary policy appears to have been premature.
Per Jansson emphasised that it is only when the Riksbank really can clearly verify that the economic activity puts the imprint of inflation, which is justified with the gradual strengthening of the krona. Therefore, it is of great importance to the krona exchange rate is now not continues to be strengthened in the way that happened the last time, before the more underlying inflation again started to rise.
”If the krona is strengthened a lot in a short time is a large risk that the Riksbank faster than desirable forced to reduce the scope to lower interest rates that are left,” he said.
Tradingportalen/Agency Directly.
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