Erik Thedéen: Inflation targeting in Sweden - lessons and challenges
Speech by Mr Erik Thedéen, Governor of the Sveriges Riksbank, at an online workshop of the National Bank of Ukraine "Monetary policy in emerging markets", 27 November 2025.
The views expressed in this speech are those of the speaker and not the view of the BIS.
I would like to begin by thanking you for the invitation to speak here today. The Riksbank and the National Bank of Ukraine (NBU) have had an important and close cooperation for many years, which has only deepened and spread to an increasing number of areas since Russia's full-scale invasion. Last year I had the opportunity to invite Governor Pyshnyy to Sweden to follow our monetary policy process and share some of NBU's experiences of financial and civil preparedness, and I am pleased to have the opportunity today to discuss the Riksbank's long experience of inflation targeting. We look forward to more opportunities like this to share experiences and further deepen our close relationship.
Wednesday 16 September 1992 was a dramatic day in the Riksbank's long history. In an attempt to defend the krona's fixed exchange rate against the ECU, the Riksbank decided to raise its policy rate to 500 per cent. But this extreme rate hike was not enough, and just a few weeks later the exchange rate target was abandoned and the krona started to float freely. The Riksbank suddenly found itself without a clear strategy for conducting monetary policy, but soon settled on a new target: to keep inflation around 2 per cent a year.