rising energy prices, but also to weak productivity growth and to the previous year ’ s weaker exchange rate having a delayed impact. however, data published two weeks ago show that both the cpi and the cpif fell in january. during 2010 cpif inflation is expected to fall, primarily as a result of companies ’ costs falling and the krona strengthening, which is expected to make imports cheaper. the rate of increase in the cpif will rise from 2012 and onwards as economic activity improves and companies ’ costs begin to rise again. at the end of the forecast period, we expect inflation measured in terms of the cpif to be close to 2 per cent. however, cpi inflation is expected to continue to rise. this is mainly because households ’ interest expenditure will stop falling and then rise as the repo rate is raised. figure 9 inflation measured as the cpi and the cpif annual percentage change source : statistics sweden from crisis interest rate to monetary policy in an economic downturn the executive board of the riksbank decided at the latest monetary policy meeting to hold the repo rate unchanged at 0. 25 per cent to attain the inflation target of 2 per cent and to give sufficient support to the economic recovery. we are expecting to begin raising the repo rate again in the summer or in early autumn 2010 ( figure 10 ). this is slightly earlier than in our last forecast, which is because of the two components i mentioned. the financial markets have become increasingly stable and statistics on economic activity – such as slightly higher growth abroad, stronger employment and higher inflation – have gradually confirmed the picture of the recovery being on firmer ground. figure 10 from crisis interest rate to monetary policy in a recession per cent source : the riksbank at the same time, we are now assuming that the increases in the repo rate can be made more gradually. this means that the forecast for the repo rate in the longer term is marginally lower than before, just under 4 per cent at the beginning of 2013. but, of course, forecasts so far ahead are very uncertain. even in the slightly shorter term, there are difficult considerations that must be made and risks connected to our interest rate decisions. as we often point out, the repo rate path is a forecast and hence by definition uncertain ; it is not a promise. how we will conduct our monetary policy in practice in the future will depend on how economic developments in sweden and abroad affect the prospects for inflation and economic activity. there is a risk that

european central bank : press conference – introductory statement introductory statement by mr jean - claude trichet, president of the european central bank and mr lucas papademos, vice - president of the european central bank, frankfurt am main, 7 may 2009. * * * ladies and gentlemen, the vice - president and i are very pleased to welcome you to today ’ s press conference. we will now report on the outcome of today ’ s meeting of the governing council, which was also attended by commissioner almunia. on the basis of its regular economic and monetary analyses, the governing council decided to reduce the interest rate on the main refinancing operations of the eurosystem by a further 25 basis points and the rate on the marginal lending facility by 50 basis points, to 1. 00 % and 1. 75 % respectively. the interest rate on the deposit facility will remain unchanged at 0. 25 %. this decision brings the total reduction in the interest rate on the main refinancing operations of the eurosystem since 8 october 2008 to 325 basis points. current key ecb interest rates are appropriate taking into account all available information and analysis. in addition to the reductions in interest rates, the governing council decided today to proceed with its enhanced credit support approach. in continuity and consistency with the operations we have undertaken since october 2008, and in recognition of the central role played by the banking system in financing the euro area economy, we will conduct liquidity - providing longer - term refinancing operations with a maturity of 12 months. the operations will be conducted as fixed rate tender procedures with full allotment. the rate for the first of these operations, to be announced on 23 june 2009, will be the rate on the main refinancing operations at that time. subsequently, the fixed rate may include a premium to the rate on the main refinancing operations, depending on the circumstances at the time. the governing council has decided in principle that the eurosystem will purchase eurodenominated covered bonds issued in the euro area. the detailed modalities will be announced after the governing council meeting of 4 june 2009. furthermore, the governing council has decided that the european investment bank will become an eligible counterparty in the eurosystem ’ s monetary policy operations with effect from 8 july 2009 and under the same conditions as any other counterparty. these decisions have been taken to promote the ongoing decline in money market term rates, to encourage banks to maintain and expand their