Purchases of government bonds

Since February 2015*, the Riksbank has purchased government bonds with the aim of making monetary policy more expansionary. Such purchases help bring down the general level of interest rates in the economy which, in turn, leads to increased general demand. To mitigate the effects of the coronavirus pandemic on the Swedish economy, the Riksbank increased its purchases of securities from March 2020 until 31 December 2021 with a total envelope of SEK 700 billion, in addition to the purchases planned prior to the pandemic. The purpose of the purchases was to keep general interest rates low and facilitate credit supply. The Riksbank intends to halve its purchases of securities during the second half of 2022 compared to the first six months. The Riksbank’s assessment is that its holdings of securities should decrease slightly during 2022. The current purchases include government bonds.

*The Riksbank started purchasing government bonds as early as 2012 on a small scale to ensure that the required systems, agreements and knowledge were in place if it became necessary to rapidly take extraordinary measures in the future. Some of the government bonds purchased up until February 2015 still make up part of the Riksbank’s bond holdings and are therefore included in the data on the Riksbank’s total holdings of government bonds reported here. 

A central bank can make monetary policy more expansionary by purchasing government bonds on the secondary market. When yields for safe assets fall as a consequence of the central bank’s purchases of government bonds, it becomes more attractive for investors to turn to alternative assets. In this way, the lower yields for government bonds spread onwards to other parts of the financial markets. In turn, the lower level of interest rates helps the banks cut rates for loans and deposits, which increases companies’ willingness to invest, at the same time as households are given increased incentive to consume. Following the rising asset prices, the wealth of both households and companies increases at the same time. All in all, general demand in the economy increases and, eventually, inflation rises too. 

More detailed information can be found in the document under “Related content” below.

Holdings of government bonds

The Riksbank’s total holdings of government bonds are reported here. The holdings are the net sum of purchased government bonds, i.e. the total sum of government bonds minus due bonds at each point in time. The holdings are reported in nominal terms and are based on the transaction date for the Riksbank's purchase of the bonds.The holdings have been reported since 2012 and include both the government bonds purchased by the Riksbank before March 2020 in accordance with the Executive Board’s decision in 2012 and the government bonds purchased by the Riksbank since February 2015 in order to make monetary policy more expansionary.

   

Figure: Holdings of government bonds

The diagram shows the Riksbank’s total holdings of government bonds purchased, both Swedish nominal and real government bonds and the Swedish government's green bondsThe figures are stated in SEK billions. Source: Sveriges Riksbank.

Change in holdings of government bonds
  SEK billions
Holdings per 31 March 2022 395.4
New purchases in April 2022 5.4
Maturing volume in April 2022 0
Holdings per 30 April 2022 400.8

 

Purchases of government bonds

Here, we present the Riksbank’s total purchases of government bonds from March 2020 onwards. Until 31 December 2021, the Riksbank purchased government bonds for SEK 91 billion, in addition to the purchases of government bonds decided by the Executive Board before March 2020. During the second half of 2022, the Riksbank intends to continue to purchase Swedish government bonds which may also include the purchase of the Swedish State’s green bonds for a total nominal amount of SEK 12 billion, as in the previous quarter.

Figure: Purchases of government bonds

The diagram shows, from March 2020 and on, both the total government bond purchases and the extended government bond purchases decided after the coronavirus pandemic outbreak which were initiated in March 2020. Source: Sveriges Riksbank.

General and specific terms and conditions

General and specific terms and conditions apply to participation in the Riksbank’s purchase auctions. The general terms can be found under related content, and the specific terms under "Auction announcements". Registration forms for new counterparties to register their participation with the Riksbank are also available under related content. A monetary policy counterparty that has already registered with the Riksbank only needs to confirm that previous registration with pertinent information still applies and, if confirmation has already been carried out, no extra confirmation is needed.

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Updated 16/05/2022