The Riksbanks monetary policy 22 September 2020 Recovery fraught - - PowerPoint PPT Presentation

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Feb 06, 2024 264 likes •402 views

The Riksbanks monetary policy 22 September 2020 Recovery fraught with great uncertainty The Riksbanks measures programme and zero repo rate provide support The Swedish economy has begun to recover Index, 2019 Q4 = 100. Sources:

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The Riksbank’s monetary policy 22 September 2020

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Recovery fraught with great uncertainty The Riksbank’s measures programme and zero repo rate provide support

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The Swedish economy has begun to recover

Index, 2019 Q4 = 100. Sources: Statistics Sweden and the Riksbank.

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Long road back for the global economy

World trade refers to trade in goods. Index, 2019 Q4 = 100. Sources: CPB Netherlands Bureau for Economic Policy Analysis.

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Great uncertainty and risk of setbacks

COVID-19 infections are rising again in several parts of the world It has not been possible to ease restrictions further Financial markets function with the support of central banks High debt levels and large budget deficits in many countries Longer term effects of the crisis?

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Loans to companies via banks Purchases of interest- bearing securities Increased access to safe and liquid assets

Decided (Utilised) 500 billion

(165 billion)

500 billion (190 billion)

Repo rate 0%

Unlimited SEK, USD 60 billion (29 billion, 2 billion)

A combination of measures most effective to keep interest rates to households and companies low

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The Riksbank's measures have helped keep interest rates low and maintain the credit supply

Market rates have come down Lending has been maintained

Interest-bearing securities with 5-year maturity, percentage points. Loans to companies and households in annual percentage change. The dashed line refers to 11 March, when the WHO declared COVID-19 a pandemic.

Sources: Bloomberg, Refinitiv and the Riksbank.

1 2

1 2 Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 Jul-20 Municipal bond Covered bond Government bond Corporate bond 3 4 5 6 7 3 4 5 6 7 Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 Jul-20 Companies, loans from MFI Households, loans from MFI

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It will take time for the economy to recover

Index, 2019 Q4 = 100. Sources: Statistics Sweden and the Riksbank.

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Some stabilisation but still a tough situation

n the labour market

Per cent of labour force. Sources: Statistics Sweden and the Riksbank.

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The crisis and temporary effects are keeping inflation down

Clear impact of the crisis and falling energy prices Statistics difficult to assess for the coming months Inflation rising slowly towards the target Long-term effects of the pandemic are uncertain

Annual percentage change. Sources: Statistics Sweden and the Riksbank.

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Important interaction between different policy areas

The Riksbank's measures effective in keeping interest

rates low

Fiscal policy more effective support for impacted sectors
Fiscal policy important factor for recovery 2021

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