© Reuters. FILE PHOTO: The sign for Sweden’s central bank is pictured in Stockholm, Sweden, August 12, 2016. REUTERS/Violette Goarant
STOCKHOLM (Reuters) – Sweden has an urgent need for further policy tightening so that the central bank does not have to take even tougher measures further ahead, Deputy Governor Martin Floden said on Thursday.
“It is urgent to hike rates once or several times,” Floden said. “Partly, because inflation now is high and we don’t want it to become entrenched and the longer we wait, potentially the more we need to react,” Floden said.
A second reason was to gauge how the economy reacts to rate hikes, which have been very uncommon in recent years, he said.
Urgent to tighten policy further, says Swedish central bank’s Floden