The foreign currency reserve
The foreign currency reserve is a financial asset that, like the gold reserve, aims to ensure that the Riksbank can carry out its tasks. The foreign currency reserve consists mainly of securities issued in US dollars and euros, as these two currencies are the most in demand 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 2023, the total market value of the foreign exchange reserves was SEK 412.7 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).