Given the Riksbank's decision on 12 February to cut the repo rate to -10bp and purchase SEK10bn in government bonds, it should come of little surprise that the minutes seemed soft.
One can describe the current policy stance as sort of asymmetric risk management. Recent data suggest that (underlying) inflation is moving slowly upwards - but after such a long period of undershooting inflation it would be much worse if it stayed low than if it rose faster than expected (even overshooting the target).
Above all, inflation expectations have become a great concern, especially over the longer term and among unions and employers' organisations. This is particularly the case as wage negotiations for almost the entire labour market start later this year.
Other risks mentioned were: the global situation, with uncertainties related to Greece and the conflict in Ukraine, and the sharp decline in oil prices (a potentially positive factor for global growth but also a risk to inflation expectations). Also the ECB: it is clear to us that the board is nervous about the massive policy actions (QE) that the European Central Bank will launch shortly and that this could end up in a stronger krona. In other words, the Riksbank wouldn't be happy to see a stronger krona at this stage (which in turn makes their forecast of exactly that happening slightly strange).
As far as the SEK10bn in bond purchases are concerned, the message is that it is a test (we find it hard to believe that the RB expects the purchases to have a major effect on inflation) and a signal that the bank is prepared to do (much) more if need be.
So, by all standards soft, but few should be surprised given the policy decision on 12 February.
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