Riksbank on the way to break with the central bank – Swedish Dagbladet

it is important for us to keep our promise with the inflation target, says Deputy Governor Martin River. Photo: Yvonne Åsell

Riksbank can be ripe to break its “follow-john” pattern with the European Central Bank ECB. It was Deputy Governor Martin river’s message when he appeared at a conference on Monday.

– In the recent past we have cut down our support purchases while the ECB has stepped up its. There is absolutely no necessity for us to do the same thing as the ECB. The Swedish economy is doing better, inflation is clearly on the right track. This can in itself be enough, he says.

Would you then be able to stop completely at the end of the year or a soft landing to buy even lower volume?

– There we has decided now to buy at the year-end and then stop. It is the monetary policy that is in our plan. But we can make new decisions as both options are possible.

If I had to guess today, I think there will be a space for us to buy more

weekly buy Riksbank government bonds and inflation-linked bonds. When the year is over, the central bank is expected to hold more than a third of all such bonds on the market. Support Purchases will be made to boost the Swedish economy and bring inflation and inflation expectations.

Now, speculation on how much more government bonds Riksbank actually can buy, but the market is too much. Martin Flodén says Riksbank starts to become a very large owner in the market but he has not landed in what its significance for future purchases.

– If I had to guess today, I think it will be a space for us to buy more, even after the New Year. But that does not mean that it is appropriate to use that space.

debt Office’s head of borrowing Thomas Olofsson Photo: Magnus Hjalmarsson Neideman

the issue of liquidity is sensitive . Should the market be disturbed too much risk is that interest rates are rising instead of falling. Moreover, the Swedish government could find it harder to borrow money in the future, for example, buyers and foreign investors disappeared.

Debt Office’s borrowing CEO Thomas Olofsson in an interview with the Swedish newspaper Svenska Dagbladet said that it is still good liquidity even if it does not is as good as it was two years ago. “Previously, investors buy larger volumes of government bonds, but the price was lower, now they settle for smaller volumes,” said Olofsson.

This summer failed The Bank of England buying the same amount of bonds they wanted. Martin Flodén says it could happen Riksbank also but it would not be great drama.

The Riksbank then buy only government bonds. When the other major central banks have bought assets they have often bought both government bonds and even mortgage bonds. So did, for example, the US Federal Reserve.

Would you be willing to buy mortgage bonds?

– There is on the list of assets that we can consider if we determine that we need to make monetary policy more accommodative. It depends on what we will be found ourselves in the position to come. But our plan of July is that we should buy what we have announced and no more, says Martin River.

Many players have set themselves on it and then it important for us to keep our promise

the governors are good at guard their responses, so also Martin River. The next interest rate meeting just over two weeks away and soon to the Central Bank in a so-called silent mode. Therefore refer Flodén happy to what was decided at the last meeting in July. Moreover, he is just one of six governors, where everyone has one vote except the chief Stefan Ingves who has the casting vote.

The summer has also given the Riksbank some breathing space. The krona has weakened, while both inflation and inflation expectations in the right direction. Martin Flodén maintains that the Riksbank’s expansive monetary policy is the right way forward.

– Our ambition is to bring inflation and thus higher nominal interest rates ahead. We have a mandate, an inflation target of 2 percent. Many players have set themselves on it and then it’s important for us to keep our promise.