In a fast-evolving global economic landscape, Sweden’s central bank, Sveriges Riksbank, has taken steps to adapt its strategies to ensure economic stability and effective monetary policy.
Recent developments highlight the Riksbank’s proactive approach: a speech by First Deputy Governor Anna Breman on innovative monetary policy communication and a decision to implement interest-free deposits for credit institutions.
These initiatives reaffirm the Riksbank’s commitment to transparency, financial independence, and resilience in turbulent times.
Recently, Anna Breman delivered a speech titled “Daring to Think Differently – On the Riksbank’s Monetary Policy Communication” at the Bank of England’s CCBS Conference on transforming monetary policy.
Breman emphasized the need for central banks to adapt their communication strategies to address uncertainty and risks in a changing economic environment.
Speaking at 14:30 Swedish time, she highlighted how effective communication is critical for maintaining public trust and guiding economic expectations.
The Riksbank, she noted, is exploring innovative ways to convey monetary policy decisions to ensure clarity and accessibility.
This includes leveraging new technologies and data analytics to provide timely and precise information to stakeholders.
Breman’s speech underscored the importance of transparency in monetary policy, particularly in an era marked by geopolitical tensions and economic volatility.
By rethinking communication, the Riksbank aims to enhance its ability to stabilize inflation and support economic growth, aligning with its mandate to maintain a low and stable inflation rate of 2%.
Breman’s remarks come at a time when the Riksbank has been navigating complex economic challenges.
The reserve bank’s recent monetary policy decisions reflect a cautious yet adaptive approach.
On June 17, 2025, the Riksbank’s Executive Board decided to cut the policy rate to 2%, a move announced alongside the Monetary Policy Report on June 25.
This decision was driven by a broad-based decline in inflation, which averaged 1.9% in 2024, close to the target.
The rate cut aims to stimulate economic growth, which increased by 1% in 2024 after two years of stagnation, while addressing a weakening labor market.
Breman emphasized that while inflation is trending downward, the Riksbank remains vigilant, monitoring forward-looking indicators to prevent setbacks.
The bank’s forecast suggests further rate cuts may occur in late 2025 and early 2026 if inflation and economic activity align with projections.
However, Breman cautioned that global uncertainties, such as trade barriers and geopolitical developments, could impact inflation and growth, necessitating a flexible monetary policy stance.
In a parallel move to strengthen financial stability, the Riksbank announced on June 11, 2025, a decision to require credit institutions to hold interest-free deposits at the central bank.
This measure, effective from 2025, is part of a broader effort to enhance the Riksbank’s self-financing and safeguard its independence.
Governor Erik Thedéen, in a March 2025 hearing at the Riksdag Committee on Finance, highlighted the importance of financial independence for maintaining confidence in monetary policy.
The interest-free deposit requirement follows a 2022 loss of over SEK 80 billion due to rising interest rates, which devalued the Riksbank’s bond holdings from asset purchases between 2015 and 2021.
By mandating these deposits, the Riksbank aims to bolster its equity, which Thedéen noted should be restored to at least SEK 40 billion to meet the requirements of the Sveriges Riksbank Act.
This initiative reflects a strategic response to the financial challenges faced by central banks globally, ensuring the Riksbank can continue to conduct effective monetary policy without fiscal constraints.
These developments illustrate the Riksbank’s multifaceted approach to addressing modern economic challenges.
Breman’s call for innovative communication complements the bank’s efforts to maintain transparency and trust, while the interest-free deposit policy strengthens its financial foundation.
Together, these measures position the Riksbank to navigate global uncertainties, stabilize inflation, and foster sustainable economic growth in Sweden.
As the Riksbank continues to adapt, its focus on forward-thinking strategies ensures it remains an independent central bank at the forefront of monetary policy innovation.