The foreign currency reserve
The foreign currency reserve largely consists 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) krona. The composition of the foreign currency reserve 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 currency reserve.
The assets in the foreign exchange reserve
On 31 December 2019, the total market value of the foreign currency reserve was SEK 420.5 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 currency reserve. Most of the foreign currency reserve is maintained in those 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 currency reserve mainly consist of government bonds. Most of the reserve is 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 currency reserve to consist of Australian dollars (AUD) and Canadian dollars (CAD).
Assets in the foreign currency reserve, by currency
31 December 2019 (per cent)