Floden: "I consider the arguments..........>

RIKSBANK: Floden: "I consider the arguments against such a monetary policy to be

strong. Resource utilisation is still fairly high. Although we expect a slowdown

in economic activity, we do not see a recession ahead. In addition, we must ask

what we would achieve by cutting the policy rate. When the policy rate is

already -0.25 per cent, the impact on lending rates would probably be limited.

The dominant effect would instead be a weakening of the exchange rate. However,

the krona is already weak. A further depreciation of the krona would lead to

unnecessary volatility and uncertainty over the development of the exchange rate

and, ultimately, the entire Swedish economy. Such a depreciation of the krona

would therefore hardly support economic activity. Neither would it be a

sustainable or desirable way of living up to the inflation target. I would

consider cutting the repo rate from today's level only if the exchange rate

starts to become overvalued at the same time as the inflation development

becomes too weak."