Foreign exchange reserve reinforced
The Riksbank has decided to reinforce the foreign exchange reserve with the equivalent of SEK 100 billion. The decision was made in the light of the uncertain situation abroad entailing increased risks to the Swedish financial system, and of the commitments to the International Monetary Fund (IMF) having increased.
The Riksbank therefore needs a sufficiently large foreign exchange reserve to be prepared, if necessary, to provide the banks with liquidity in foreign currencies. This will enable the Riksbank to safeguard the safe and efficient functioning of the financial system.
Sweden currently enjoys a high level of international confidence because of its stable financial system and strong public finances. The Swedish banks are well capitalised in an international comparison and have only minor exposures to the euro area countries with sovereign debt problems. The Swedish financial sector is at the same time substantial and to a large extent uses funding in foreign currencies. The Riksbank assesses that it is appropriate to reinforce the foreign exchange reserve now to maintain international confidence in Sweden and to be able to meet future obligations.
The Riksbank intends to borrow foreign currency through existing agreements with the Swedish National Debt Office. The reinforcement is temporary and should be phased out when appropriate.