Swedish Rate Cuts Should Help Boost Labor Market

Via The Swedish Wire:

The krona’s appreciation risks hampering the Swedish central bank’s efforts to keep inflation around its 2 percent target, Deputy Governor Karolina Ekholm said, according to Bloomberg.

She told reporters that it’s “not good” if the krona slows inflation below the Riksbank’s forecasts.

She also reiterated calls for lower interest rates to help the Swedish labor market and cautioned that focusing on financial stability can hamper the bank’s main goal of stabilizing demand, Bloomberg reported.

“One should not have exaggerated expectations of what monetary policy can achieve when it comes to reducing the relatively high level of unemployment”, Ekholm said in a speech published today on the Stockholm-based Riksbank’s website.

“However, as long as inflation is expected to be clearly under the target of 2 percent I believe there is scope to use monetary policy to try to alleviate the situation on the labour market”.

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