The way the term ”normalise” is used in this context usually means that the policy rate is being increased after having been very low for a period, that is, it is simply a way of pointing out the natural direction for the policy rate in future. At the same time, there is an implication in the term “normalise” that there is a level for the policy rate where it normally should be. Some analysts appear to have interpreted this to mean that the Riksbank’s increases in the repo rate point reflect that there is an end in itself to achieving such a "normal" level now that the economic upturn is well established and most curves are pointing upwards, quite regardless of how inflation may develop. However, this is not the way we reason. The fact that the interest rate is below the "normal" level is not in itself a reason to increase the rate, even if real economic developments are favourable. It is not an argument that can stand for itself. The decisive factor for future interest rates is the result of our forecasts and assessments of inflation and economic developments as a whole. It may be the case, for instance, that different factors are expected to hold back inflation over a relatively long period of time and that there may thus be reason, even in an economic boom, to allow interest rates to “normalise” – if we are to use this term – at a slower rate than would otherwise be justified.
13.10.2020  Panel: Macro Economic Policy in Transition – Perspectives from Advanced and Emerging Countries IMF Annual Meetings: Macro Conversations Pablo Hernández de Cos Governor  As in the rest of the world, the COVID-19 outbreak has given rise to a health and economic crisis in the euro area that is unprecedented in recent history. And, again, similarly to other jurisdictions, economic authorities have in the face of this situation responded forcefully both at the domestic and European level. In the particular case of monetary policy, in the last seven months, we, at the European Central Bank (ECB), have deployed an extensive package of measures to mitigate the impact of the pandemic on the euro area economy. From the outset, the ECB faced three significant pandemic-related challenges: first, the need to stabilise financial markets throughout the euro area, to head off cross-country financial fragmentation; second, to protect the supply of bank credit, which is especially important for funding for households and SMEs in Europe; and third, to counter the downward pressure on the medium-term inflation outlook stemming from the COVID 19 crisis, in accordance with our price stability mandate. Against this backdrop, we adopted a series of measures that may be grouped into two main blocks. As regards the first block, the ECB approved a broad raft of measures to provide liquidity to banks so that they, in turn, were able to ensure access to credit for households and firms. The measures included a significant improvement to the conditions of the TLTRO III operations.