Anna Seim: The role of alternative scenarios in monetary policy communication

Speech by Ms Anna Seim, Deputy Governor of the Sveriges Riksbank, at the 2025 ECB Forum on Central Banking, Sintra, 2 July 2025.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Thank you for inviting me to speak today. While it is widely recognised that effective communication is a key part of monetary policy, communication strategies differ greatly across central banks. This is likely due to differences in institutional features that influence the possibilities and constraints that we face.

Since adopting a regime of flexible inflation targeting in 1995, the Riksbank has chosen a path of high transparency. One reason for this is the fact that we are highly independent, and with that independence comes a need for accountability that is facilitated by transparency. A second rationale is that transparency can make monetary policy more effective if we succeed in managing the expectations of companies, households and markets. 

To this end, we aim to convey the Executive Board's reaction function by publishing (i) a policy rate forecast (since 2007), (ii) alternative scenarios capturing perceived risks and how monetary policy will respond to different developments, and (iii) attributed minutes shortly after each policy decision.

In my remarks today, I will briefly comment on our policy rate path but focus on our work with alternative scenarios in the Monetary Policy Report.