Grants from the EU and currency exchanges
Grants from the EU in the form of agricultural and structural support, etc, are paid in euro and have previously been exchanged by the Riksbank before the funds were transferred to the Debt Office. In future, the funds will be paid directly to and exchanged by the Debt Office. This year, the EU grants are expected to be approximately SEK 10 billion.
At present, the Debt Office has foreign currency flows which mainly derive from management of the foreign currency debt. The Debt Office amortises the foreign currency debt at an annual pace of SEK 25 billion. In addition, we expect to purchase foreign currency to pay interest on the foreign currency debt for around SEK 11 billion this year.
From March 9, the Debt Office will also sell foreign currency to exchange grants paid in euro to kronor. The remaining payments in euro during 2005 are calculated at approximately SEK 3 billion. The currency exchanges by the Debt Office comply with the Government's guidelines aim at creating predictability and avoiding large market movements. The exchanges made as a result of grants from the EU will form part of the total currency exchanges distributed equally between the months in net terms.
The EU contribution
Outgoing payments from Sweden to EU are made in Swedish kronor. The largest item being the Swedish EU contribution. The Debt Office already co-ordinates the payments of the EU contribution. The present change concerning these flows is mainly of administrative character and will not imply any change in the government's transactions in the money- or foreign currency market.
For additional information, please contact:
Charlotte Lundberg (Head of Debt Management)
tel: +46-8 613 46 47