Figure 7(a) foreign currency reserve in relation to GDP and to the Swedish banking system’s foreign funding and Figure 7(b) foreign currency reserve as a proportion of the country’s short-term debts in foreign currency 2016 7(a ) 15  7(b) 100  Reserves to FX funding Reserves to GDP  342  90  322  80  12  124  70  66  60 52  9  50 41  40 6  36  30  26  20  0 0  02  04  06  08  10  12  14  16  14  18  9 10 6 7 8 8 3 4 4 4 4 5 1 1 2 2 2 3 3  IRL CYP NDL GRC MLT BGR FRA DEU BEL GB SWE prel FIN EST ESP ITA SVN CAN AUT SVK AUS SWE SGP NOR HKN JPN CHE CZE ISL KOR  10  3  Note. Fi gure 7(a), per cent. Foreign funding refers to Swedish banks’ (including Swedish subsidiaries but excl uding foreign s ubsidiaries) market funding and deposits i n foreign currency. The broken part of the l ine represents the Riksbank’s forecast based on the reduction of the currency reserve proposed i n the draft. Figure 7(b), countries marked in grey belong to the euro a rea. Sources: IMF, Statistics Sweden a nd the Riksbank. Conclusions for monetary policy I opened by noting that these are unusual times in the Swedish economy.
SPEECH DATE:  16 May 2017  SPEAKER:  Governor Stefan Ingves  VENUE:  Swedish Economics Association  SVERIGES RIKSBANK SE-103 37 Stockholm (Brunkebergst org 11) Tel +46 8 787 00 00 Fax +46 8 21 05 31 registratorn @ riks ban k.se www.riksb ank.s e  Monetary policy challenges – weighing today against tomorrow* I’d like to begin by thanking you for the opportunity to come here to the Swedish Economics Association. As many of you know, this is a tradition, and today’s speech is my twelfth in a row. I have always appreciated the opportunity to come here and discuss both current issues and long-term themes of more fundamental significance for the Riksbank’s operations. Today’s speech is about monetary policy and its challenges in a slightly longer perspective. But before broaching that subject, I would first like to comment on the news item published by the Riksbank this morning. In brief, it states that the Executive Board is considering switching over to a new target variable, the CPIF, this autumn, and introducing a ‘variation band’ to illustrate uncertainty over the development of inflation. Ever since the inflation target was introduced nearly 25 years ago, it has been defined as the annual change in the consumer price index, the CPI. However, in recent years, the CPI has become increasingly difficult to use as guidance for monetary policy.