In its liquidity management, the Debt Office manages daily surpluses and deficits in the central government’s cash balance. The overall objective is to ensure that the central government is always capable of fulfilling its payment obligations on time.
The Debt Office invests cash funds or takes out short-term loans in the money market, depending on whether the government's account at the Riksbank is at a positive or negative balance. Foreign currencies are also included in the liquidity management.
Efficient and secure liquidity management requires good planning based on reliable forecasts of borrowing and investment needs. At the same time, a great deal of flexibility is required to handle unexpected payment flows appropriately.
The Debt Office’s financial and risk policy contains the instruments that are allowed to be used in liquidity management and instructions for limiting credit and counterparty risks. We also have an internal protocol that provides guidance on the choice of counterparty, instrument and maturity.
What happens with surpluses and deficits?
Surpluses are primarily invested in Riksbank Certificates and deposits. We also use covered mortgage bonds with short maturities, repos in covered mortgage bonds and tri-party repos.
In the event of a deficit, we take out loans on the deposits market or by issuing treasury bills or commercial paper.
On tap T-bills
In order to be able to finance a deficit in advance, we issue T-bills with a time to maturity of one to two months on tap. This borrowing is complemented with T-bills with tailor-made maturities – liquidity bills – which are also issued on tap.
An advantage of liquidity bills for us as well as the investors is their flexibility. The maturity can be adapted to both our and investors’ needs. We can also choose the date for issuing liquidity bills in order to suit our borrowing requirement.
The conditions for sales are shown in the form of maturities, volume and prices. Sales take place by telephone through our primary dealers of T-bills.