Debt Office provides supplementary analysis on foreign currency exposure

News 13 October 2023

The Swedish National Debt Office submitted a report today supplementing this year’s proposed guidelines for central government debt management. The Government requested supplementary analysis after the Riksbank presented its response to the proposed guidelines.

The report regards the ongoing phase-out of the foreign currency exposure of the central government debt. The phase-out means that the Debt Office sells Swedish kronor and buys foreign currency over a four-year period. The reason for phasing out the exposure is that analysis shows that it poses heightened risk without generating any expected cost benefit over time. The decision to phase out was made on the basis of the statutory objective for the debt management.

The Debt Office still considers that the foreign currency exposure should continue to be phased out at the pace presented in last year’s proposed guidelines. The transactions are considered to be so small that they do not affect the krona rate, and the period of time is sufficiently long for preventing the entire phase-out occurring when the krona is temporarily weak. Simultaneously, we avoid the risk of higher costs remaining for a long time.

Government Report: Information supplementing the analysis for proposed guidelines