Anna Seim: Risks of higher inflation justify intense vigilance
Presentation “I am considerably more concerned that inflation will be too high than that it will be too low. But the current interest rate level constitutes a good starting point to, once more reliable signals are available, adjust monetary policy if deemed warranted.” This is how Deputy Governor Anna Seim described her stance at the Executive Board's most recent policy rate decision, when she spoke at ABG Sundal Collier on Thursday.
Date: 26/03/2026 12:00
Speaker: Deputy Governor Anna Seim
Place: ABG Sundal Collier
Anna Seim, deputy governor.
“The war in the Middle East and its effects impact a global economy that has been resilient but subject to severe challenges for some time. Rising energy prices, which drive up production costs further, can now aggravate the situation and give rise to negative supply effects and potential disruptions in complicated production networks,” said Ms Seim.
She said that there were nevertheless three reasons to leave the policy rate unchanged: that underlying inflationary pressures are in line with the target, that there are also scenarios that would motivate a lower policy rate and that reliable signals drown in the massive noise currently characterising the information flow.
“In this situation, it is most robust to maintain a policy rate of 1.75 per cent. Today’s slightly expansionary but close-to-neutral interest rate constitutes a good starting point to, once more reliable signals are available, adjust monetary policy if deemed warranted.”
Ms Seim had also been invited to speak on “Driving forces behind the development of the krona”, based on the speech she gave in November. A key message of the speech was that it is very difficult to predict the development of the krona, but that the trend movements of the exchange rate can be understood with hindsight.
She noted that in times of uncertainty the krona exchange rate has often depreciated, but not always. Last year, for example, the krona strengthened significantly despite the high level of uncertainty, but it has now weakened again, partly as a result of the concerns about the war.
She highlighted that, over time, financial flows have become increasingly important for exchange rate developments and that understanding the krona requires combining traditional macro data with careful analysis of capital flows.
“We have a floating exchange rate in Sweden, but the development of the krona is important because it affects inflation and economic activity. We therefore monitor the development of the krona very closely and constantly conduct analytical work to better understand its driving forces.”