Wednesday, January 6, 2016

As Stocks Plunge in 2016, Swedish Central Bank Holds Extraordinary Meeting, Says Will "Instantly Intervene" If Necessary


Source - Zero Hedge

Markets have started 2016 with a healthy dose of turmoil, and so many were wondering how long - and who - would be the first central bank to intervene in either directly or verbally in markets.
Moments ago we go the answer when Sweden's Riksbank announced it has held an extraordinary monetary policy meeting in which it took the decision required to be able to "instantly intervene on the foreign exchange market if necessary, as a complementary monetary policy measure, to safeguard the rise in inflation."
The decision involves the Executive Board entrusting to the Governor, together with the First Deputy Governor, the task of deciding the details with regard to possible interventions.

During 2015, the Riksbank has cut the repo rate to –0.35 per cent, adjusted the repo-rate path downwards and purchased large amounts of government bonds and also announced additional purchases during the first half of 2016. However, since the last monetary policy meeting in mid-December, the Swedish krona has appreciated against most other currencies. If this develop-ment were to continue, it could jeopardise the ongoing upturn in inflation.

The Riksbank has no target for the exchange rate, but the krona's value in relation to other currencies is an important factor in the inflation forecast. Inflation is rising but has been under the target of 2 per cent for a relatively long period of time. To safeguard the role of the inflation target as benchmark in price-setting and wage formation, it is therefore important that inflation continues to rise.

The Riksbank still maintains a high level of preparedness to take other monetary policy measures in addition to the currency interventions if this is necessary for inflation to stabilise around 2 per cent. The repo rate could be cut further, the securities purchases could be extended and the Riksbank could lend money to companies via the banks.

Deputy Governor Martin Flodén entered a reservation against the decision. He thought it appropriate to wait before implementing any further monetary policy stimulation and did not consider currency interventions to be a suitable tool to make monetary policy more expansionary in the current situation.
And now, we sit back and wait for some of the "real" central banks to follow suit because this aggression against manipulated asset prices will surely not stand. 
Posted by at

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)

Consider contributing to this site

Hope you like this not for profit site.

 We could not devote so much energy into continuing this blog if it was not for the support of readers.

We greatly appreciate any support you provide!
Fair Use of Information for ALL All data is freely available to the ALL, as an inherent inalienable right of consciousness and existence, for the use of any being in creation. No Claim of Ownership is made by MDT, for any data presented on this page or elsewhere. Any information, writing, photographs, videos or content on this page is freely available to ALL without claim of Intellectual Ownership. We advise providing attribution to this website (MakingaDifferenceToday369) when, and if, data herein presented is used elsewhere; so as to remain honest, transparent and to maintain the public trust as to where the information was found. Any and All data herein presented has been re-claimed for the collective benefit of all sentient life from any and all parties who seek to limit its dissemination. Any claims of intellectual ownership or copyright, that were once ascribed to content on this page, or elsewhere, is NULL and VOID; as a result of a misrepresentation of right of ownership and breach of trust by any party whom presumes to claim title and exclusive right of use. No requests, threats, or notices which seek to limit the sharing information for the benefit of ALL will be honored. However, a humble request to provide information in a certain way or form will be considered, up to and including, the partial removal of data, and only as an agreement between 2 honorable parties whom fully disclose and honor a moral duty to the truth. FAIR USE NOTICE: This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. It is being made available in an effort to advance the understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, and so on. It is believed that this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. In this respect we are in accordance with the statutes as well as Natural Law.  Issued pursuant to and governed by I AM, eternal essence, in body. MDT is a humble messenger of the One Infinite and Absolute Creator, in service of the Truth and the ALL.