Foreign currency loans to fund SEK 200 billion of reserves
The Riksbank plans to fund around SEK 200 billion of its foreign currency reserve through loans via the Swedish National Debt Office. Borrowing would begin in Q1 2027, subject to stable markets, reducing currency risk and replacing FX swaps.
Matching currencies on both sides
Following its 2021 decision to self-finance reserves, the Riksbank holds foreign currency assets against Swedish krona liabilities.
It plans to gradually replace part of this funding with foreign currency loans, matching assets and liabilities so exchange rate changes offset each other.
The loans would also replace FX swaps used for hedging since 2023.
Implementation involves selling foreign currency for kronor and replacing existing swaps over 12–18 months.
Transactions will be spread evenly to minimise exchange rate effects.
Further implementation information will accompany the December 2026 monetary policy decision.
The Riksbank says the change has no monetary policy purpose and is not intended to alter the reserve's long-term size.
A reserve with contingency duties
The Sveriges Riksbank Act of 2023 permits foreign currency borrowing, managed by the Swedish National Debt Office, up to 5 percent of GDP at the time of the decision.
The reserve was worth approximately SEK 450 billion at end-October 2026.
It meets contingency needs, including foreign currency liquidity support for banks operating in Sweden, foreign exchange intervention and Sweden's obligations in the International Monetary Fund's Special Drawing Rights system.
Reserve assets must be managed at low risk, reflecting their purpose and the Riksbank's central bank role.
Funding changes, not monetary easing
The distinction is between reserve funding and reserve capacity.
Currency-matched borrowing targets balance-sheet exposure rather than the amount of foreign currency available for contingencies.
The conditional start and phased transactions make implementation dependent on market conditions.