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 700 billion, up to 31 December 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 government bonds.

*The Riksbank started purchasing government bonds as early as 2012, but at that time, this was 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 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 nominal and real. The figures are stated in SEK billions. Source: Sveriges Riksbank.

Change in holdings of government bonds
  SEK billions
Holdings per 31 May 2021 360.2
New purchases in June 2021 3.2
Maturing volume in June 2021 0
Holdings per 30 June 2021 363.4

 

Purchases of government bonds

Here, we present the Riksbank’s total purchases of government bonds from March 2020 on. Until 31 December 2021, the Riksbank will purchase government bonds for SEK 91 billion, in addition to the purchase government bonds that the Executive Board decided on before March 2020.

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 26/07/2021