1. Monetary Policy Report 2008:3

2. Repo rate cut to 3.75 per cent
Further cuts over the coming six months
To alleviate the effects of the financial crisis on economic activity and to attain the inflation target of two per cent

3. Repo rate cut Financial crisis Credit crunch Deeper economic downturn
Lower inflationary pressures
Other measures also necessary to improve
the functioning of the markets

4. The financial crisis… …affects for instance Interest rates
Stock markets
Commodity prices
Exchange rates

5. Interbank rate and repo rate Per cent
Three-month interbank rate
Sources: Reuters EcoWin and the Riksbank

6. Mortgage rates have risen more than the repo rate Per cent
Interbank rate
Mortgages – SBAB
Mortgages - average
Refers to three-month mortgage rate from SBAB, three-month interbank rate and
monthly average for three-month mortgage rate for mortgage institutions’ new lending.
Sources: Reuters EcoWin, SBAB, Statistics Sweden and the Riksbank

7. Falling stock markets Index, 1999-01-04=100
Euro area (EuroStoxx)
Sweden (OMXS)
USA (S&P 500)
Source: Reuters EcoWin

8. Lower oil price Brent crude, USD per barrel
Oil price, outcome
Spot price on 22 October 2008
Futures, MPU September 2008
Futures, average up to 16 October 2008
Note. Futures prices are calculated as a 15-day average.
Sources: Intercontinental Exchange and the Riksbank

9. Falling commodity prices USD, index (2000 = 100)
Food
Metals
Other agricultural products
Total
Source: The Economist

10. Weaker krona Trade-weighted exchange rate (TCW), index, 1992-11-18=100
TCW forecast MPR 2008:3
TCW forecast MPU September 2008
Source: The Riksbank
Note. Broken line refers to the Riksbank’s forecast (quarterly data).

11. Deeper economic downturn
Lower capital value
More difficult to borrow
Lower demand from abroad
Increased uncertainty

12. Sources: The IMF, Statistics Sweden and the Riksbank
Lower growth abroad and in Sweden Annual percentage change, calendar-adjusted data
Sweden
World
Note. Broken line and bar represents the Riksbank’s forecast.
Sources: The IMF, Statistics Sweden and the Riksbank

13. Pessimism among households… Net figures
Swedish economy
Own finances
Labour market
Source: National Institute of Economic Research

14. Sources: National Institute of Economic Research and Swedbank
… and in the business sector Seasonally-adjusted index and net figures, manufacturing industry
Purchasing managers’ index (left scale)
NIER’s confidence indicators (right scale)
Note. Index over 50 is growth, under 50 is decline.
Sources: National Institute of Economic Research and Swedbank

15. Lower GDP growth Quarterly changes in per cent calculated as an annual rate, seasonally-adjusted data
MPR 2008:2
MPU September 2008
MPR 2008:3
Note. Broken lines represent the Riksbank’s forecasts.
Sources: Statistics Sweden and the Riksbank

16. Lower employment Thousands, seasonally-adjusted data, 3-month moving average
Newly-registered job vacancies
Unfilled job vacancies
Redundancy notices (right scale)
Source: Swedish Employment Service
Note. Redundancy notices include outcomes to 20 October.

17. Higher unemployment Per cent of work force, seasonally-adjusted data
Unemployment years
Unemployment years
MPR 2008:3
MPU September 2008
Note. Broken lines represent the Riksbank’s forecasts
Sources: Statistics Sweden and the Riksbank

18. Lower inflation CPI, Annual percentage change
MPR 2008:3
MPU September 2008
Note. Broken lines refer to the Riksbank’s forecasts
Sources: Statistics Sweden and the Riksbank

19. Lower repo rate Per cent, quarterly average
MPR October 2008
MPU September 2008
Note. Broken lines represent the Riksbank’s forecasts
Source: The Riksbank

20. Uncertainty in the forecasts
Global economic activity and financial crisis worsen
Higher inflationary pressures
Weaker krona

21. Repo rate a forecast – not a promise Per cent, quarterly averages
Source: The Riksbank

22. Measures for the financial system
Loans (against collateral) in SEK and USD
Changed collateral requirements
Liquidity assistance to Kaupthing

23. Riksbank’s loans Offered Implemented
SEK SEK 280 billion SEK 180 billion
(Further SEK 80 billion Monday 27/10)
USD USD 27 billion USD 27 billion (approx. SEK 130 billion)
Assumption: 1 USD=7.5 SEK

24. Measures taken by the Government sector
The Riksbank SEK 380 billion
Swedish National Debt Office SEK 100 billion
(Can be compared with outstanding stock of covered mortgage bonds: approx. SEK billion at end of August 2008)
Government
Finansinspektionen (Swedish Financial Supervisory Authority)

25. Repo rate a forecast – not a promise Per cent, quarterly averages
Source: The Riksbank