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Ingves at the IMF says "It's time to start tightening"

RIKSBANK
  • Ingves says he is talking in general terms (not in specific reference to the April Riksbank decision) but says that it's time to start tightening. For the Riksbank he says the signalling from the policy rate is "much, much higher" than using QT. Full quotes from him below:
  • "We are at a different juncture because inflation is high, way above our target so I'm not really talking about normalisation, I'm really talking about a different type of monetary policy in an environment where policy rates will have to go up."
  • "Let me add one caveat, because we have our policy rate decision on 27th April so I'm staying out of technical details and talking about these things in fairly general terms."
  • "Given that that's where we are, rates globally are on their way up, and then of course Sweden being a small very, very open economy when it comes to exports, imports and capital flows, we are affected by that and inflation is way above target. So it's time to start tightening in one form or another but that of course raises the issue of what to do and how to do these things."
  • "Technically speaking you can do these things any way you want so it's not that there is a certain order between shrinking your balance sheet and raising the policy rate. You can do it whichever way you want and that probably differs substantially from country to country. In our case the signalling effect using the policy rate is much, much higher than, let's say, shrinking the balance sheet."
  • EURSEK lower on the comments, but still above the yesterday's lows.
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