The Swedish Central Bank lowered the interest rate on five occasions last year, partly at the May meeting and partly at the last four meetings of the year. On all occasions, it concerned a reduction of 0.25 percentage points, except in November when the rate was lowered by 0.5 percentage points.
On the whole, one has pursued a sensible monetary policy, but we think that one could have been a little faster with the reduction and above all that one should have lowered also in June, says economist John Hassler, one of the report authors.
Criticizes arguments
He says that the consequences of not lowering the rate in June have been "small but not entirely negligible".
GDP growth and unemployment would have developed a little better, but it's small things we're talking about, he says.
The total reduction of the interest rate from 4 to 2.5 percent was, according to the report authors, reasonable.
In the report, some of the arguments that the Swedish Central Bank has had around its decision not to lower in June are criticized. The Swedish Central Bank assessed, among other things, the risk of backlash against the krona's exchange rate as great at a lowering, which according to the report authors found weak evidence for.
"Well-balanced assessment"
Another criticism concerns that the Swedish Central Bank argued for waiting with a lowering until the effects of previous interest rate reductions had become visible. The objection here is that the effects of monetary policy occur with significant delay.
The Governor of the Swedish Central Bank, Erik Thedéen, however, believes that the Swedish Central Bank's decisions have been well-balanced.
We have clearly accounted for why we thought as we thought and we also lowered the interest rate at that time (June). We stand by that. But it's difficult trade-offs, he says.
