can in turn offer loans to companies, sek 500 billion has been allocated for this purpose. the third measure gives the banks the opportunity to borrow an unlimited amount from the riksbank. and the fourth measure is the riksbank's decision to lend up to 60 billion us dollars to banks that need foreign currency. these measures have two effects. they facilitate credit supply as the riksbank in this way supplies more money to the financial system. when the volume of money increases, there is also downward pressure on market rates. in other words, the result is a secure credit supply and expansionary monetary policy. figure 1. yields on 5 - year bonds per cent sources : macrobond and the riksbank read about all the measures the riksbank has taken on our website. information on the measures is updated weekly. see https : / / www. riksbank. se / en - gb / press - and - published / updates - on - the - riksbank - and - the - coronaviruspandemic / the - riksbanks - measures - in - connection - with - the - corona - pandemic /. 2 figure 1 shows the development in yields on different types of bond on the swedish market. the economic crisis initially meant that bond yields rose. this was not a desirable development. but they have recently begun to fall back. to me, it is obvious that the riksbank ’ s expansionary monetary policy measures have pushed down market rates. and if necessary, the riksbank will do more. inflation statistics difficult to interpret under normal circumstances, monetary policy can be based on the analysis of a long line of economic quantities. as monetary policy is conducted with an inflation target, the statistics on inflation outcomes become particularly important. during the economic crisis an obvious problem with inflation statistics has been that there are no prices for the goods and services that cannot be consumed at present. this of course creates problems when calculating the consumer price index ( cpi ). statistic sweden ( scb ) have clearly described their methods. 2 for products that have no prices, they use the price development on similar products that do have prices. for products that do not have “ similar ” products, such as various types of foreign air travel, the annual percentage change in total cpi is used. replacing missing prices in this way is usually referred to as imputation. the total weight in the cpi for the products where prices are imputed in this way is not

speech date : 17 june 2020 speaker : deputy governor henry ohlsson venue : riksbank. se sveriges riksbank se - 103 37 stockholm ( brunkebergstorg 11 ) tel + 46 8 787 00 00 fax + 46 8 21 05 31 registratorn @ riksbank. se www. riksbank. se monetary policy during the economic crisis * the economic crisis the world economy is now experiencing is the deepest for many decades. both demand and supply have declined substantially around the world. economic policy faces major challenges. sweden, which is a small open economy, has been severely affected by the reduced economic activity in the world around us. naturally, we have also been affected by how international economic policy to deal with the crisis has been formulated. i will in this speech highlight three challenges that monetary policy has faced during the spring. these challenges have by no means disappeared, we will continue to deal with them. the first challenge has been that the financial markets function less smoothly during severe economic crises. this has been an important base for the riksbank's monetary policy during the spring. monetary policy aims to attain the inflation target. a second challenge at present is that the inflation statistics are difficult to interpret. for instance, there are no prices for many goods and services because there is quite simply no economic activity on these markets. monetary policy must also be forward looking. under normal circumstances this means that monetary policy is formulated according to forecasts of future economic developments. the third challenge is that we are currently living with genuine uncertainty. who could have imagined in autumn 2019 that spring 2020 would turn out the way it did? * i would like to thank marten lof, who has helped me with this speech. moreover, i have received valuable comments from charlotta edler, mattias erlandsson, rebecka hallerby, peter kaplan and marianne sterner. 1 monetary policy has pushed down market rates during the spring, the riksbank has decided on a number of monetary policy measures. when financial markets do not function as normal, the credit supply in the economy is threatened. here, i wish to highlight four measures that the riksbank has implemented. 1 the first has concerned buying government bonds, mortgage bonds and municipal bonds, as well as commercial paper for a total of sek 300 billion. the riksbank has, secondly, decide to give the banks the opportunity to borrow from the riksbank so they