2017 will be another year full of challenges for the Riksbank, with an unpredictable krona and the groovy price of oil.
today in the morning was the minutes from the Riksbank’s monetary policy meeting, 20 december, in the year to the public. In the stands to read about exactly how the discussion went at the monetary policy meeting, where governor Stefan Ingves was forced to put the foot down and use his casting vote in the a a crucial question.
A large part of the meeting was occupied by concerns about the turned up the housing market in Sweden.
How long can interest rates be this low? How curbed households ‘ rising debt?
READ MORE: the Riksbank leaving the repo rate unchanged
the Riksbank’s response is that we should be vigilant on the situation – but not to act. At least, not yet.
– the Riksbank was not unanimous in its last decision, as we know. After today’s strong inflation figures, the probability of a further rate cut is very small. Inflation approaching 2 per cent. The next step will be a rate hike, but it is still most likely that it will in the beginning of 2018, ” says Anna Breman, chief economist at Swedbank.
the rate of Inflation according to the CPI (consumer price index) increased to 1.7% in december from 1.4 percent in november. The CPI rose by 0.5 per cent from november to december, 2016. The inflation rate according to the measurement with a fixed interest rate increased to 1.9 percent in december from 1.6 percent in november which is the highest figure since december 2010.
the News, which was published by Static sweden (SCB) in the day playing governor Stefan Ingves in the hands.
2016 – eventful year for the Riksbank
2016 meant a series of challenges for the Riksbank.
First, strengthened the crown so much that it threatened to intervene on the foreign exchange market to weaken the currency and ensure inflation.
Then voted the british out of the EU, and Donald Trump won the u.s. presidential election in november. Suddenly dropped the Swedish currency and the euro cost over a period of 10 dollars.
READ MORE: Here are the most expensive villas in 2016
Which suited the Riksbank, despite protests and criticism. In 2016, the year’s last interest rate announcement was presented, in december, governor Stefan Ingves:
” We have a floating exchange rate. It is good for the Swedish economy at the current krona, not least in export industries, and contributes to that inflation rises, which we want to achieve, ” he said in the Swedish newspaper svenska Dagbladet in december.
by Contrast, was preceded by the news of the disagreement in riksbanksgruppen and Stefan Ingves used his casting vote to push through their will. The six governors were in agreement to keep the repo rate at 0.5 per cent.
Here the Riksbank was divided
it was, However, one disagreement on the extension of the stödköpen of interest-bearing securities 30 billion during the first half of 2017.
It was Stefan Ingves Kerstin af Jochnick and Per Jansson, pushed through the decision to extend the stödköpen of government bonds and inflation linked bonds. Martin Flodén wanted to buy for 15 billion, while Henry Ohlsson and Cecilia Skingsley wanted to end the purchases completely.
Stefan Ingves casting vote settled.
– We buy government bonds every week. It presses down the general level of interest rates and it increases the amount of money in the system. It will lead to more lending and it contributes to an increased demand in the Swedish economy so that prices will rise, ” said Stefan Ingves in the SVD then.
READ MORE: Concern for the height of the ränt – the experts ‘ best advice
In a post in the discussion wondered Stefan Ingves if we in Sweden have our own house in order.
the Answer was both a yes and no.
– When it comes to fiscal policy he is willing to answer yes to that question. Since the new regulatory framework for public finances was introduced during the second half of the 1990s, fiscal policy has worked much better than in the period before. This does not mean that challenges may arise in the coming years, so it is always. One example is that the demographic trend may push up public spending, said mr Ingves during the talks.
Warning of the swedes ‘ home loans
alarm bells are ringing as usual over the housing market.
” The Swedish housing market is highly valued in a historical perspective. Credit growth in households is still high, and amounted to 7.3 per cent in October (bank loans). Home prices rose by 7.9 per cent in november. High house prices and increasing household indebtedness means very large risks to economic and financial stability. A warning was issued for the Swedish housing market of the ESRB (European systemic risk board (esrb) in november. The ESRB pointed to the rapidly rising house prices and high and increasing indebtedness. Even the IMF pointed out in its article IV report on risks in the Swedish housing market and called for reforms, reported from the protocol of the day.
READ MORE: Swedes believe in rising bopriser
He noted:
– the Fsa has taken some steps, but more is needed to reduce the risks.
As on previous occasions, expressed a number of members continued concern over the households ‘ growing indebtedness and stressed the need to combine measures in different policy areas in order to get a long-term sustainable economic development in Sweden.
Donald Trump’s victory was discussed
the protocol also comment that the deputy governor Cecilia Skingsley, the unexpected election victory of Donald Trump in the U.S. in november of last year.
She notes that the Riksbank’s assessment of the global economy – and inflationsläget in the short term has been revised up slightly since the previous monetary policy meeting after the election results.
READ MORE: Cecilia Skingsleys concern for bolånekunder
Rising expectations of a fiscal expansion in the US is cited as a major explanation to the global ränteuppgångarna. Skingsley found the explanation reasonable during the meeting, but wanted at the same time emphasize:
” There will be significant uncertainty about the content of the incoming administration’s economic policies for a long time. She stressed that it is therefore good that, in the section on uncertainty and risk in the draft monetary policy report indicated that AMERICA’s economy and politics is an important risk factor for the economic development in Sweden, says Cecilia Skingsley.
No comments:
Post a Comment