Skingsley sees turning point for Riksbank policy

Sveriges Riksbank has averted disaster in the short term and now needs to turn its attention to longer-term risks, deputy governor Cecilia Skingsley said in a speech today (April 7).

During remarks at Danske Bank in Stockholm, Skingsley said the Riksbank appeared to have been successful in taking aggressive action to head off declining confidence in the inflation target.

While acknowledging the situation was complex, with rising risks in the housing market as a result of policy easing, Skingsley said she believed the current situation to be better than the alternative.

Resource utilisation in Sweden is now close to normal and core inflation consistent with a return to target, albeit probably in a "fitful" fashion, she noted. Without ruling out the possibility of new easing measures, she said it was "time to take a longer view".

"In my contribution to the debate at the [February 10 monetary policy] meeting, I wanted to say that I now have a greater tolerance for setbacks in that we now have a more favourable situation in Sweden," she said.

I wanted to say that I now have a greater tolerance for setbacks in that we now have a more favourable situation in Sweden

But Sweden remains vulnerable to global shocks, which may yet force the Riksbank to act, Skingsley added.