STOCKHOLM (Reuters) - Swedish central bank governor Stefan Ingves doesn't see a risk of deflation at the moment, although it can't be ruled out in the short term, he said in an interview with news agency TT published on Sunday.
The Riksbank has poured money into the financial system in an effort to dampen the negative effects of the new coronavirus outbreak, offering 500 billion Swedish crowns ($49 billion) in loans to companies via banks and boosting its purchases of securities by 300 billion crowns.
It is also offering $60 billion in funding in dollars.
"Not at the moment, we have to hope that this passes sooner or later," he told TT, responding to a question about whether he sees a deflation risk.
"If we and the fiscal system provide the economy with enough money and businesses get started again, then there is no reason to think the whole thing would turn into deflation."
Ingves noted price declines couldn't be ruled out in the short term, however, in an environment with tumbling demand.
"Yes, it can't be ruled out in the short term, but we hope that this doesn't last forever."
Ingves said in a speech on Friday the Riksbank was prepared to take further measures if needed to mitigate the effects of the pandemic on the economy.
(Reporting by Johannes Hellstrom; Editing by Mark Potter)