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Minutes: Thedéen: Data dependency dominates; weak SEK problematic

RIKSBANK
  • "The overriding principle to establish the direction of monetary policy going forward in my opinion should therefore be to evaluate incoming data, including the development of the krona, and how this information affects our inflation assessment. It is essential that inflation starts to fall from its currently far too high levels. We should also carefully evaluate the actions of neighbouring central banks to assess how they affect the development of inflation in Sweden."
  • "My conclusion is therefore to closely follow reported data, and right now in any case attach a little less weight to forecasts, especially those across a longer time horizon. Lately, incoming data indicates a need for tighter monetary policy. We are now increasing the policy rate by 0.5 percentage points and my assessment is that we will continue with another increase during the spring of 25 or 50 basis points in accordance with the rate path. But incoming data is important for that decision as well."
  • "Unlike developments a few years ago, when inflation in Sweden was too low, a weak krona is now problematic from a monetary policy point of view. A weaker krona puts upward pressure on prices of imported goods... a weak krona, and possible continued depreciation are not welcome... Today’s decision to raise the policy rate and to sell government securities should in my opinion have a strengthening effect on the krona and this would only be a welcome development; it makes our task of bringing inflation down to 2 per cent easier."
  • "A somewhat faster winding-down of the government bond portfolio, which has a longer remaining time to maturity, should be primarily regarded as a normalisation of the holdings, following the rapid build-up during the low-inflation environment of recent years, with extremely low policy rates."
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