rate path in which the repo rate is reduced now or with an extended repo - rate path in which the repo rate is maintained at a low level for a longer period of time. some of my colleagues have had certain doubts about a repo - rate level below 0. 25 per cent. as you know, i do not share these doubts. in this context, the extended repo - rate path has the advantage that these doubts are no longer relevant. it also has the advantage that it reduces the monetary policy decision to the question of when the repo - rate should be increased. today, i intend to discuss my view of monetary policy and explain in more detail why i entered a reservation at the latest monetary policy meeting. much of the reasoning is the same as when i advocated a lower repo - rate path. 2 the new points that i want to make here today relate to the reasons why i entered a reservation in favour of the extended repo - rate path rather than a lower repo - rate path with a reduced repo rate. let me begin by presenting my general view of monetary policy. one may ask why the focus should be on the cpif and not the cpi. in a situation in which significant reporate changes have very large direct effects on the cpi, i consider it to be more appropriate to focus on stabilising the cpif around the inflation target, instead of the cpi. see also the speech “ why a lower repo rate? ” that i made at umea university on 24 february this year for a detailed account of that reasoning. flexible inflation targeting stabilises both inflation and resource utilisation when discussing what repo - rate path one should choose it is natural to take the riksbank ’ s monetary policy objectives as a starting point. the sveriges riksbank act and its preparatory work stipulate that monetary policy focuses on stabilising inflation around the inflation target and resource utilisation around a normal level. this is what is referred to as flexible inflation targeting. that the riksbank should aim to stabilise inflation follows from the act ’ s price - stability objective, which the riksbank has chosen to specify as an inflation target of 2 per cent. that the riksbank should stabilise resource utilisation follows from the fact that the preparatory work for the act states that the riksbank “ without prejudice to the price - stability target, should support the goals of general economic

eva srejber : the euro in the euro area and in sweden speech by ms eva srejber, second deputy governor of the sveriges riksbank, to the eu club of sweden, gothenburg, 16 october 2001. * * * i should like to begin by thanking you for giving me the opportunity to come here and speak about the euro and its usage. the euro is evidently hot news right now, which is probably not surprising when one considers that in just two and a half months'time the 300 million inhabitants in the euro area will be replacing the banknotes and coins in their wallets. on 1 january the euro, which so far has existed asmerely an electronic currency it will also finally exist in the form of banknotes and coins. a gigantic logistics project the newspapers have been full of stories about the introduction of the euro for some time now, including fears that the transition to the euro will be a field day for counterfeiters. however, most articles concern the pure logistics behind the transition from the old national banknotes and coins to the new euro ones. it is not surprising that this should be given so much attention. the transition to the euro is a project of gigantic proportions. someone, probably a frenchman, has tried to indicate the size of the operation by comparing the weight of the coins to be distributed with the weight of the eiffel tower. the coins are supposed to weigh the equivalent of 24 eiffel towers! i don't know whether or not this is a good comparison, but it is certainly a huge project. starting on 1 january next year, almost 15 billion banknotes and 50 billion coins will be put into circulation. up until 28 february the euro banknotes and coins and the old national ones can be used parallel to one another, but with effect from 1 march the euro, and only the euro, will be legal tender throughout the euro area. the changeover is not merely a question of replacing old banknotes and coins with new ones in euro ; it also involves all manner of changes from parking meters and new values on stamps to converting prices and wages. the fact that the euro will soon make the transition from the electronic world to the more tangible world of physical notes and coins has a strong symbolic value for the political endeavour to bring the countries of europe closer together. it will also make it easier to compare prices of goods and services across the entire spectrum throughout the euro area. it will be interesting to see how this contributes to