Published 26 November 2021 at 16.25
Economics. The economy is strong and inflation has risen rapidly, largely driven by low interest rates. But the Riksbank leaves the repo rate unchanged at zero percent and to buy new bonds with the same lighter requirements as during the pandemic.
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During the first quarter of 2022, the bank will buy bonds to compensate for future maturities in the Riksbank's securities holdings.
The Executive Board's forecast is that the holdings will be approximately unchanged in 2022, after which it will gradually decreases, and that the repo rate will be raised during the latter part of 2024.
With such a monetary policy, inflation is expected to be at target in the long run. How this will happen, however, remains to be seen.
In the fixed income market, many expect that inflation will not slow down at the pace the Riksbank believes and that an interest rate increase may therefore be necessary sooner.