The Swedish Riksbank has gone from being the best among its peers in 2008 and 2009 at forecasting inflation to lagging behind its peers in two-thirds of the predictions, writes Bloomberg after comparing forecasts by six central banks between 2008 and 2013. The Riksbank’s errors can be traced back to 2010 when Governor Stefan Ingves raised rates despite Europe being in the midst of the worst economic crisis since WWII, states Bloomberg.
Appearing before the Committee on Finance yesterday, Riksbank Governor Stefan Ingves tried to pour oil on troubled waters when he said a strong krona was unwelcome news in the current situation. Afterwards, he told the media that it would be helpful if the krona remained at current levels, in terms of bringing up inflation to the 2 per cent target.
Ingves also said the central bank was prepared to take further measures, although currency intervention was not his first choice.