The Executive Board of the Riksbank usually holds seven or eight scheduled monetary policy meetings over the course of a year, at which it makes decisions regarding the repo rate. In conjunction with three of these meetings a detailed Inflation Report is published that explains the Board’s decision. Following the other meetings, a press release is published. The meetings are timetabled around six months in advance, partly as a fixed point in the internal work and partly to inform the financial markets and other monetary policy analysts.
The forecasting work that results in an Inflation Report begins with a meeting at the Monetary Policy Department, where newly-received statistics are discussed and assessed. At the ensuing meetings the discussions gradually result in a forecast of how inflation and the rest of the economy will develop. This work leans partly on estimations from econometric models. The Monetary Policy Department presents its forecast, in the form of diagrams and tables, to the Executive Board at a relatively early stage in the process at a meeting of what is called the monetary policy group (MPG). This group is led by the member of the Executive Board responsible for presenting proposals for Inflation Reports and decisions on monetary policy measures, currently Irma Rosenberg. The group consists of all of the members of the Executive Board, the advisers to the Executive Board, the head and deputy heads of the Monetary Policy Department and a number of senior officials from different parts of the bank. Since a large number of the economists at the Monetary Policy Department also participate in the meeting, it is usually called the “large” MPG. The members of the Executive Board provide their tentative views on developments at this meeting.
The Monetary Policy Department then continues its work and compiles a document that can be regarded as the first draft of the Inflation Report. This document is discussed at an Executive Board meeting, where the Board makes more definite decisions regarding the forecasts and contents of the Inflation Report. The editorial work on the Inflation Report continues, and the final text is discussed at a further Executive Board meeting, the final one before the monetary policy meeting. The Inflation Report is published at the same time as the decision on the repo rate, usually the day after the monetary policy meeting.
Prior to the monetary policy meetings that do not coincide with the publication of an Inflation Report, the forecasting work is similar, but on a smaller scale. The assessments made by the Monetary Policy Department are compiled into an internal report that is presented at a meeting of the monetary policy group. This report forms the starting point for the discussion at the Executive Board's monetary policy meeting. The major difference is thus that the extensive and time-consuming editorial process required when an Inflation Report is presented is not needed on these occasions.
All of the monetary policy meetings are also preceded by a meeting of the so called “small” monetary policy group, which is also headed by Irma Rosenberg. This group consists of the head and deputy heads of the Monetary Policy Department, a representative from the Market Operations Department, the advisers to the Executive Board, the Director of Communications and the Chief Press Officer. The members of this group give recommendations to the chairman regarding the repo rate decision, and also regarding issues such as forecasts, risk assessments and communication.
Based on the above-mentioned data, the Executive Board attempts to establish a common view on developments in the economy and inflation. Naturally, the opinions of the Executive Board, the monetary policy group and the Monetary Policy Department sometimes vary on particular issues of both greater and lesser significance. In the end, however, it is the Executive Board that makes the repo rate decisions, and it is therefore also the Board that has the final say regarding the forecasts.
Links to the Riksbank’s Inflation Reports and the boxed texts that have been published in the Inflation Reports can be found below.