Purchases of government bonds

Since February 2015, the Riksbank has purchased government bonds with the aim of making monetary policy more expansionary. Such loans 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 corona pandemic on the Swedish economy, the Riksbank intends to purchase securities in an amount of up to SEK 500 billion, up to 30 June 2021, in addition to the purchases planned prior to the pandemic. The purchases are aimed at keeping interest rates in general at a low level and contributing to an efficient supply of credit. The current purchases include inter alia government bonds.

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.

Holdings of government bonds

The Riksbank’s total holdings of government bonds as a result of purchases within the framework of the Riksbank’s government bond-purchasing programme 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.

Figure: Holdings of government bonds

The diagram shows the Riksbank’s total holdings of government bonds purchased within the scope of the Riksbank’s programmes for purchases of government bonds, both nominal and real. The figures are stated in SEK billions. Source: Sveriges Riksbank.

Change in holdings of government bonds
  SEK billions
Outstanding volume 31 August 2020 367,7
New purchases in September 2020 8
Maturing volume in September 2020 0
Outstanding volume 30 September 2020 375,7

 

Purchases of government bonds

Here, we present the Riksbank’s total purchases of government bonds from March 2020 on. Until 31 December 2020, the Riksbank is offering to purchase government bonds for SEK 45.5 billion, in addition to the previously decided purchases of government bonds.

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 19/10/2020