Monetary policy report, February 2017

Economic activity is strengthening, but there is considerable political uncertainty abroad and the risks of setbacks have increased. For inflation to stabilise around 2 per cent, a continued strong level of economic activity and a krona that does not appreciate too rapidly are required. Monetary policy therefore still needs to remain expansionary. The Executive Board of the Riksbank has decided to hold the repo rate at −0.50 per cent and there is still a greater probability that the rate will be cut than that it will be raised in the near term. The purchases of government bonds will continue for the first six months of 2017, as was decided in December. The Executive Board has also taken a decision to extend the mandate that facilitates a quick intervention on the foreign exchange market.