MNI BRIEF: Riksbank Bunge Backs Tentative Policy Approach
MNI (LONDON) - Riksbank Deputy Governor Aino Bunge said that as policy only works with a lag and as it was a mistake to place much weight on recent, single month data showing higher than expected inflation or stronger activity she favoured a "tentative" approach to rate setting.
"There are early signs of a rebound, but it is important that we receive further information that confirms our forecast," Bunge said in a speech at a JP Morgan event. (see MNI INTERVIEW: Riksbank Head Sees Turbo-Charged Policy Biting )
The Riksbank has been at the front of the pack of advanced economy central banks in taking its policy rate down, by 175 bps since May, to around where it believes the neutral rate is, and Bunge and other board members are now suggesting easing may have come to a halt. She noted Swedish fiscal policy was expansionary and the uncertainties around the bank's forecast were high.