MNI BRIEF: Hard To Say If Policy Neutral - Riksbank's Seim

Riksbank Deputy Governor Anna Seim said on Thursday that the neutral rate becomes less useful when the policy rate is around its estimated level, and that the focus of policy is not on moving into expansionary territory or holding at neutral.

"For practical purposes, what's to say that …  we are at neutral, contractionary or expansionary, it becomes increasingly hard, the closer you get to something that's akin to a neutral level," she said at a PIIE event, adding that as long as inflation expectations are anchored the central bank has more flexibility in policy making.

The Riksbank's updated assessment of long-run R star is from 1.5-3% with the current policy rate inside the range at 2.25%. (See MNI INTERVIEW: Riksbank's Bunge Sees Less Krona Pass-Through)

BOE Deputy Governor Clare Lombardelli similarly de-emphasised R star as a guide to policy at the same event.  Lombardelli said it was not the time to change the inflation-targeting regime given high uncertainty around recent developments as "it is not even clear what direction all of this is moving." (See MNI POLICY: BOE, ECB Probe Whether QT Can Lower R-Star)