In the left-hand graph in Figure 6, the conclusion of new purchases is marked by the disappearance of the blue bars, and the right-hand graph reflects how the bond holdings can be expected to be gradually scaled back. 3 See “The Riksbank’s strategy for a gradual normalisation of monetary policy” article in Monetary Policy Report, December 2017. 6 [13]  Figure 6. The bond portfolio can be expected to decrease in the longer term We have concluded new purchases and are reinvesting until further notice 80 70 60  Reinvestments of coupons Reinvestment of principal payments New purchases  80 70 60  50  50  40  40  30  30  20  20  10  10  0  H1 H2 H1 H2 H1 H2 H1 H2 H1 2015 2015 2016 2016 2017 2017 2018 2018 2019  Expected gradual reduction in the portfolio if reinvestments were to cease  0  Note. Left-hand graph. Nominal amounts, SEK billion. The development of reinvestments from mid-2018 onwards is a forecast and refers to nominal amounts. The final amounts will depend on current market prices. Right-hand graph. Nominal amounts, SEK billion. Forecast up until June 2019, after that a technical projection with the assumption that no further reinvestments are made. The vertical line marks the shift between forecast and technical projection. Source: The Riksbank  The purpose of the bond purchases has been to support general economic development and to safeguard the inflation target.
The repo rate is expected to be increased very slowly – we are “taking our foot of the gas” rather than “applying the brakes” According to our forecast in December, the next interest rate increase is expected during the second half of this year. Thereafter, the forecast indicates that the interest rate will be increased by about 0.5 percentage points per year. From a historical perspective, this is a very slow rate-hike cycle. We can see this in the lefthand figure in Figure 4, which compares with previous periods when the repo rate has been raised. 1 Note that this figure shows the change in the repo rate compared with the initial position, and the horizontal axis indicates the number of days that have passed. The repo rate is expected to have risen by about 1.5 percentage points during the whole forecast period. In the right-hand figure, we see that, in the end of the forecast period, the fourth quarter of 2021, the repo rate is expected only to have reached a level of 1 per cent. 1 See also the article “What usually happens when the repo rate is raised?” in Monetary Policy Report, October 2018. 4 [13]  Figure 4.