♦ The path ‘consistent with the target’ which is announced in 5 December 2005 ‘’General Framework of Inflation Targeting Regime and Monetary and Exchange Rate Policy’ and constitutes the base for the principle of “accountability”. • 2006 end-year point target. ♦ The path consistent with the 2007 end-year target, under contemporary data set. The inflation forecasts given in Graph 25 were made under the base scenario developed on the basis of the assumptions and short-term outlook mentioned above, and the stance under which the Central Bank will progressively cut its policy interest rates in the forthcoming period. Accordingly, it is forecasted, in the light of current information, that inflation will be realized between the 4.8-6.4 percent at the end of 2006 and between the 2.9-5.4 percent at the end of the first nine months of 2007. In other words, according to the forecasts that have been produced within the framework of today’s data set, inflation will regain a downward course starting from the second quarter of the year. This tendency will become more apparent as of the third quarter and year-end inflation will be realized close to the target (Graph 25). The Graph also displays forecasts on the output gap that constitute the basis for the inflation forecast. Accordingly, the output gap will continue to remain negative throughout 2006. In other words, the contribution of overall demand and capacity conditions to the falling inflation process will continue in 2006 as well, albeit with a decline compared to the previous years.
As you can all see, a lot has happened over the past ten years. For instance, we can observe that:   The foreign currency reserve is SEK 325 billion larger. This increase is mainly because we have borrowed the equivalent of SEK 200 billion in foreign currency through the Swedish National Debt Office to strengthen the foreign currency reserve. The Riksbank’s balance sheet 2004 and 2014 SEK billion  Source: The Riksbanken  2  The formal term in the balance sheet is “lending to credit institutions in Sweden related to monetary policy operations denominated in Swedish kronor”. BIS central bankers’ speeches  3    We have once again acquired a securities portfolio in Swedish krona. The Riksbank previously had a portfolio of Swedish securities but then this was phased out more than ten years ago.   The stock of notes and coins has declined, partly due to card payments and electronic payments becoming more common. As a consequence of this, we now have monetary policy liabilities instead of a monetary policy claim. This means that we are now borrowing excess liquidity from the banking system instead of lending money to cover a liquidity deficit. I will return to this issue later on.