Swedish central bank governor Stefan Ingves doesn't see a risk of deflation at the moment, although it can't be ruled out in the short term, he said in an interview with news agency TT published on Sunday.
FILE PHOTO: Governor of Sveriges Riksbank, the central bank of Sweden, Stefan Ingves speaks during a news confernce at the Riksbank headquarters in Stockholm, Sweden, December 19, 2019. TT News Agency/ Jessica Gow via REUTERS
STOCKHOLM - Swedish central bank governor Stefan Ingves doesn’t see a risk of deflation at the moment, although it can’t be ruled out in the short term, he said in an interview with news agency TT published on Sunday. The Riksbank has poured money into the financial system in an effort to dampen the negative effects of the new coronavirus outbreak, offering 500 billion Swedish crowns in loans to companies via banks and boosting its purchases of securities by 300 billion crowns.“Not at the moment, we have to hope that this passes sooner or later,” he told TT, responding to a question about whether he sees a deflation risk.
“If we and the fiscal system provide the economy with enough money and businesses get started again, then there is no reason to think the whole thing would turn into deflation.” Ingves noted price declines couldn’t be ruled out in the short term, however, in an environment with tumbling demand.Ingves said in a speech on Friday the Riksbank was prepared to take further measures if needed to mitigate the effects of the pandemic on the economy.
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