Debt Office to wind up a strategic position in the Swedish krona
Press release 29 August 2022
The Debt Office has decided to wind up a strategic position in the Swedish krona against the euro. The intention is to close the position gradually at a pace adapted to market conditions.
The Debt Office started to build up a position for a stronger krona against the euro in 2018. Since then, the krona rate has fluctuated around values close to the level prevailing when the decision was made. During this time, major changes have occurred in the global economy, which has altered the conditions for the position in terms of cost and risk. Because of this, the Debt Office has decided to wind up the position.
In light of the great uncertainty about developments ahead, the Debt Office has now decided to wind up the position in the Swedish krona. In our opinion, it presents risk today without generating any material cost benefits for Swedish taxpayers,” comments Director General of the Debt Office, Karolina Ekholm.
When the Debt Office builds or winds up positions, according to Government guidelines it shall do so gradually and announce it in advance. The Debt Office intends to wind up the current position in the krona at a pace adapted to market conditions.
The Debt Office has a mandate from the Government to take positions in the Swedish krona to a maximum of SEK 7.5 billion with a view to reducing the cost of the central government debt. The current position of just below SEK 7 billion has been built up gradually through foreign exchange forwards in which the Debt Office has bought Swedish kronor against euro. Such purchasing of forwards reduces the costs of the central government debt if the krona appreciates.
The Debt Office's operations shall be characterized by an openness to the public and the media. The right of access to official business is a cornerstone of Swedish democracy.
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