The foreign currency reserve

The foreign exchange reserves are a financial asset that, like the gold reserve, aims to ensure that the Riksbank can carry out its tasks. The foreign exchange reserves largely consist of securities issued in US dollars and euros, as these are the most important currencies when it comes to being able to provide liquidity to the financial system in a crisis.

Swedish banks currently have liquidity requirements in primarily US dollars (USD), euros (EUR), Pounds sterling (GBP) and Norwegian (NOK) and Danish (DKK) kroner. The composition of the foreign exchange reserves shall reflect which currencies the Riksbank needs to hold for contingency purposes and the Executive Board has therefore decided that assets in these currencies shall be included in the foreign exchange reserves. 

The assets in the foreign exchange reserves

On 30 April 2020, the total market value of the foreign exchange reserves was SEK 414.3 billion. The Riksbank’s preparedness to provide temporary liquidity assistance in foreign currency at short notice places heavy demands on the assets in the foreign exchange reserves. The foreign exchange reserves are mostly maintained in the currencies in which emergency liquidity assistance may be needed and in such assets as can rapidly be converted into liquid funds. Therefore, the assets in the foreign exchange reserves mainly consist of government bonds. The reserves are mostly made up of the five currencies that the Riksbank needs to hold for contingency purposes but, in order to spread the risk, the Riksbank has also chosen to allow a small part of the foreign exchange reserves to consist of Australian dollars (AUD) and Canadian dollars (CAD).

Assets in the foreign currency reserv, by currency, 30 April 2020

Figure: The foreign currency reserve.csv

The diagram shows the assets in the foreign exchange reserves and the proportion of each currency of which the foreign exchange reserves consist. The foreign exchange reserves mostly consist of US dollars (USD) and euros (EUR). The foreign exchange reserves also include pounds sterling (GBP), Canadian dollars (CAD), Australian dollars (AUD), Norwegian kroner (NOK) and Danish kroner (DKK). On 30 April 2020, the total market value of the foreign exchange reserves was SEK 414.3 billion. Download the data from the diagram by clicking on the arrow to the right, above the diagram. Source: Sveriges Riksbank.

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Updated 30/09/2020