The Riksbank plans to finance the equivalent of around SEK 200 billion of its foreign currency reserve with foreign currency loans via the Swedish National Debt Office, so that assets and liabilities in the same currency offset each other and currency risk on its balance sheet falls. The borrowing would also replace the FX swaps the bank has used for currency hedging since 2023, under the self-financing approach it adopted in 2021.
The bank provisionally intends to start in the first quarter of 2027, provided market conditions remain stable, with full implementation taking 12 to 18 months and the transactions, including sales of foreign currency for kronor, spread evenly to minimise the effect on the exchange rate. The reserve was worth about SEK 450 billion at the end of October; the bank said the change is not intended to affect its long-term size, serves no monetary policy purpose, and that further detail will come with the December monetary policy decision.