“If the direction is unfavorable to achieving the inflation target within the time that we want to reach it, well then we will act.”
The statement comes from Deputy Governor Cecilia Skingsley (picture) on an arrangement with SEB. She makes clear that the Riksbank is on the ball when it comes to new actions and say that you are well prepared.
On the financial market goes speculation about the new measures from the Riksbank warm. And the bank can thus strike already on Wednesday. The reason is the Swedish krona has strengthened against the euro in the last month.
Cecilia Skingsley admits that the exchange rate is an important factor in inflation and a stronger currency increases the likelihood that the Riksbank will to act. And then cares Executive Board members not only on the level of the crown is on – but also the course of development direction is important.
In addition, she says bluntly, and in common with other Executive Board Members have said, that the interest rate can tolerate be reduced further. She does not consider it a problem if we as bank customers ultimately receive less interest paid on our bank accounts. Instead, she believes that households will still have money left in the bank, even if it would cost. Banks then turned into a kind of Shurgard, for your money. You have to pay for storage.
Of course you get Skingsley issue of new measures might very next day. The answer is: “The Executive Board is always capable, around the clock every day of the week, it’s whether we have scheduled Board meetings or not.”
Her statements rhymes pretty well with the forecasters now believe more action. Some argue that it is even more less interest and new bond purchases already on Wednesday. Pär Magnusson at Royal Bank of Scotland writes in a market letter of the Riksbank would not act against the krona, which is a threat of deflation control or risk the bank to undermine their credibility.
” To an outsider, the entire layup seem slightly absurd “
Meanwhile, unrest for growing household debt remains – debts rise as home prices rose. The situation with household debt is so serious and complex that it is not enough just an action, says Skingsley, speaking of the upcoming amortization requirement. To overcome development is thus required more, but the debt level that is appropriate is not easy to get the hang of. One must make an overall assessment, she said.
To an outsider, the entire layup seem slightly absurd.
The Swedish economy is not in crisis, we have a growth and increased employment. But inflation is now so important that the direction of the krona make the Riksbank again plunge into new untested chips.
Not even Cecilia Skingsley can answer how low interest rates can be . We try us up, she says and believe it is an open question was the exact level is. She notes that there are other countries that are lower, as if this would be any guarantee that at negative interest rates is the best way forward.
Prototyping Workshop continues. Even more less interest, yet more stimulus, which teaches stoke asset values. Home prices continue to rail, household debt continues to increase and the stock market pumped up.
But now that – Where is that speech about global assessment?
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