I believe that there is a broad understanding among households, companies and market agents that we need to adapt monetary policy and reconsider how we should set  BIS Review 106/2007  3  the repo rate in future when new information changes the economic picture. We have been clear about the fact that a forecast is by definition uncertain and that it becomes more so the further ahead it stretches. And the interest rate path presented in the Monetary Policy Report is indeed a forecast. It is not a promise! The fact that we do not have perfect knowledge of the future is no reason to refrain from being as open and clear as possible with regard to what we believe will happen. We must form an opinion of how the policy rate should develop in the future regardless of whether we publish it or not. If it turns out that we have made an incorrect assessment in our forecast, it would not have been less incorrect just because we had refrained from telling anyone about it. It is hardly reasonable that we should try to gain greater credibility by hiding things or sending unclear signals about one of the most important variables in our analysis. I believe it is better that we are open about what our decisions are based on, now that the inflation target is so well-established that we are able to be open.
We have so far only presented two forecasts for the policy rate, and as I mentioned earlier, there is a fairly large measure of ”learning by doing” for all those involved before everything falls into place. Everything does not always work perfectly from the start. But as I said, the purpose is that our communication will become clear and more efficient. And I am fairly convinced that we will get there, once the new system has been established. Clarity in the way we express ourselves in speeches and press releases The Riksbank has also changed its method of signalling monetary policy in speeches and press releases. In a broad sense, signalling means that we communicate in some way what we are intending to do with the repo rate. A narrower – and perhaps more common – interpretation of signalling is that it is when representatives of the Riksbank describe in speeches and press releases how they consider the interest rate should be set at the next meeting, and perhaps slightly further ahead. Previously, the Riksbank signalled ”by degrees”. Between the monetary policy meetings the individual Executive Board members held speeches on the theme of "the current situation” or something similar. There we indicated, more or less explicitly, how we thought the interest rate should be set.