Debt Office on-lends foreign currency to the Riksbank

 

The background to this is that the Riksbank has utilised part of the foreign exchange reserve for, among other things, loans to Swedish banks and foreign central banks and now wishes to restore the foreign exchange reserve to its former size; see the Riksbank's press release at www.riksbank.se.

 

The Debt Office will mainly fund lending to the Riksbank in euros and dollars in the capital  and money markets. In the money market it will be done primarily through commercial papers. We have during the first half of 2009 borrowed substantial amounts in both dollars and euros. Part of the currency that we have accumulated will now be lent to the Riksbank. As usual, we are also able to gain access to currency financing through borrowing in kronor that are then swapped to foreign currency.

 

In our March forecast we estimated that we would during 2009 borrow SEK 129 billion in foreign currency, of which SEK 77 billion would be in bonds. So far, we have issued SEK 76 billion in foreign currency bonds and borrowed 30 billion via krona swaps, that is, in total SEK 106 billion.

 

In our forecast we expected that we would lend SEK 50 billion in foreign currency to the Swedish Export Credit Corporation. In the current situation we consider that this on-lending may be significantly less or even not required at all. Foreign currency funding during 2009, including on-lending to the Riksbank and Iceland, would in such cases be of the magnitude of SEK 180 billion.

 

For further information, please contact:
Bo Lundgren, Director General of the Swedish National Debt Office, +46 8 613 46 51
Thomas Olofsson, Head of Debt Management, +46 8 613 47 82