role in this context. but before i do so, i would first like to discuss the changes in our method of communication made over the past two years and the reasons behind them. what are the reasons behind the increased openness and clarity? many consider that the riksbank is currently one of the world ’ s most open central banks. 2 and we have taken further steps in this direction over the past two years in particular. but what are the reasons behind this development towards greater openness? i think there are two reasons – democracy and efficiency. the first concerns our role as an independent authority. the second is linked to the fact that our communication with the financial markets and the general public is essential for monetary policy and the financial system to function efficiently. page 38 in blinder, a. s., ( 2006 ), “ monetary policy today : sixteen questions and about twelve answers ”. i fernandez de lis, s. and f. restoy ( ed. ), central banks in the 21st century, banco de espana. see, for instance, eijffinger, s. and p. geerats, ( 2006 ), “ how transparent are central banks? ” european journal of political economy, vol. 22, 1 - 21. our independence requires openness the riksdag and ultimately therefore the swedish people have given the riksbank considerable independence. but this is a “ freedom with responsibility ” that goes hand in hand with the requirements for insight and accountability. this is how things should be in a democracy. openness is also something that traditionally imbues the swedish public administration system in general. one of the corner - stones is the principle of public access, which means that the authorities ’ activities should as far as possible be carried out in an open way. and this also applies to the riksbank, of course. but openness is not only a requirement in itself but also a necessary condition for monetary policy to work. it does not work unless the riksbank and the objective of our activities are supported and legitimated by the people. and this requires that we are open and clear. it should be easy to critically examine how monetary policy is conducted and how well we live up to our principles. most people probably agree that the riksbank ’ s openness has contributed to a good monetary policy debate in recent years. openness and clarity contribute to monetary policy functioning better but it is not only democratic reasons that have led to the riks

policy. policy has therefore focused on the underlying or core rate of inflation as measured by und1x ; this averaged 1. 2 %, with constituent annual rates in these three years of 1. 4, 0. 9 and 1. 4 %. the report that has been submitted to the committee today contains an appendix that is intended to serve as a foundation for the committee ’ s evaluation of the implementation of monetary policy and its outcome in the period 1997 - 99. this is something that the committee requested earlier. let me now consider the implementation of monetary policy in the course of 1999. as an indicator of inflation, undinhx has merits as well as drawbacks, as i have pointed out on many occasions. besides excluding imported goods, the index has a tendency to eliminate prices for domestic goods and thereby disregard inflation effects from important structural factors. but it does serve to illustrate the extent to which domestic demand pressure contributes to inflation ’ s path. monetary policy in the past year the early months of 1999 were marked by continued effects of the asian crisis on the world economy, with weaker international demand. in order to prevent this from leading to a weaker economic trend in sweden and thereby a lower path for inflation, the riksbank reduced the repo rate twice, in february and march, bringing it down to 2. 90 %. the situation stabilised during the late spring and summer. the relatively relaxed monetary policy that had been implemented for a number of years - both in sweden and in many other parts of the world economy - played an important part in the improvement that occurred during 1999 and contributed to more positive economic forecasts. it was then important for the riksbank to take timely action so as not to have to implement a more pronounced monetary tightening and economic retardation to cope with rising inflationary pressure at a later stage. a process was therefore initiated in november that amounts to successively taking our foot off the monetary “ accelerator ”. as the after - effects of the asian crisis and the financial market turbulence in the autumn of 1998 subsided, a strong economic stimulus from monetary policy was no longer required. in november 1999 and february this year the repo rate was therefore increased by a total of 0. 85 percentage points. the analytical and monetary policy challenges that confronted the riksbank during 1999 were not minor. the strong growth of demand in recent years has been accompanied by paths for underlying and trend inflation that have been weaker than earlier relationships seemed to suggest. a number of reasons have been put