Swedish Riksbank Ready to React Once Corona Impact Is Clearer

(Bloomberg) -- The governor of Sweden’s central bank, Stefan Ingves, said there’s too little clarity around how the coronavirus will affect the economy to consider monetary policy responses now. But he also said the bank is ready to act should the need arise.

Speaking to reporters in Stockholm on Saturday, Ingves said there continues to be “genuine uncertainty” surrounding the virus.

“You have to study, follow, adapt and react when things get a bit clearer,” he said. “I’m not willing to jump to conclusions immediately. This is something we will spend time on ahead, but it would be very premature to have a strong opinion on the situation already today.”

The Riksbank made history in December, when it ended half a decade of negative interest rates despite a slowdown in the Swedish economy. Since then, many analysts have warned that policy makers may have moved prematurely. The outbreak of the coronavirus has added to speculation that the Riksbank will be forced to backtrack on its December hike, and once again resort to negative rates.

Ingves said policy makers still need more information to better understand the potential impact of the virus.

“We currently don’t know if this is temporary” so it’s “difficult to make any forecast on what may happen,” he said. “Stock markets always go up and down, and it’s something you have to live with.”

Story Link: Riksbank’s Ingves Sees “Genuine Uncertainty” Around Coronavirus

To contact the reporters on this story: Love Liman in Stockholm at jliman1@bloomberg.net;Niclas Rolander in Stockholm at nrolander@bloomberg.net

To contact the editor responsible for this story: Tasneem Hanfi Brögger at tbrogger@bloomberg.net

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