The Riksbank’s consultation response regarding he Swedish National Debt Office’s Proposed guidelines for the management of central government debt 2024-2027

However, the Executive Board thinks that it should be noted that the Swedish krona has weakened substantially since 2021 and the Riksbank considers that it is currently undervalued. The weak krona makes it more difficult for the Riksbank to attain the inflation target now that inflation is high.

The Executive Board therefore considers that the Government and the Debt Office should at present consider pausing or at least reducing the pace of the phasing out of the central government debt's currency exposure. The phasing out, taking into account the amount and time period, is not expected to have any major direct effects on the exchange rate. However, it is unfortunate that the Swedish National Debt Office, after a decision by the Government, is selling Swedish krona while the Riksbank is buying krona, in a situation where the krona has weakened in an unjustified manner over a long period of time. Investors may find it difficult to understand this process. Since the krona is judged to be undervalued, a pause should not lead to higher costs for central government borrowing.