The Riksbank’s measures in connection with the corona pandemic

The Riksbank implemented a large number of measures during 2020 to alleviate the economic effects of the coronavirus pandemic and support the Swedish economy. Through these measures, the Riksbank has helped to facilitate access to credit and liquidity. This has reduced the risk of a shortage of money and sharply rising interest rates exacerbating the situation. The measures have gradually been terminated with an improved situation and thus reduced needs. The Riksbank’s assessment is that its holdings of securities should decrease during 2022. The forecast is that the holding will continue to decline after 2022. This contributes to inflation returning to the target slightly further ahead.

Ongoing measures

Purchases of securities

During the second part of 2022, the Riksbank intends to decrease its purchases with three quarters compared to the purchases made during the first six months and buy securities for SEK 18.5 billion. Purchases include government bonds, covered bonds (mortgage bonds), municipal bonds and corporate bonds. 

The Riksbank’s purchases of securities

Summarising information about the Riksbank’s purchases of securities

Purchases of government bonds

Read more about the Riksbank's purchases of government bonds

Purchases of covered bonds (mortgage bonds)

Read more about the Riksbank's purchases of covered bonds

Purchases of corporate bonds

Read more about the Riksbank's purchases of corporate bonds

Purchases of municipal bonds

Read more about the Riksbank's purchases of municipal bonds

 

 

Reduced the overnight lending rate to banks

The Riksbank has reduced the overnight lending rate loans to banks from +0.75 percentage points (prior to the pandemic) to the repo rate +0.10 percentage points to ensure that the overnight rate on the market for Swedish krona is close to the repo rate. This measure has been taken also to make it less expensive for the banks to have access to overnight loans.

Read more on the page Monetary policy instruments

 

Concluded measures

The infographic show the scope decided for individual programmes of measures and how much of these programmes has been used so far.  Purchases of government, mortgage, mu-nicipal and corporate bonds, and commercial paper – scope: 700 SEK billions, utilised: 668* SEK billions. Funding for lending – scope: 500 SEK billions, utilised: 165 SEK billions. Increased access to liquidity – scope: unlimited, utilised: 31,7 SEK billions. Loans in US dollars – scope: 60 USD billions, utilised: 2 USD billions.

The amounts in the row above show the envelopes decided on for each of the Riksbank’s measures, and the amounts in the row below show how much, in total, has been utilised in the different programmes. Regarding the purchases of interest-bearing securities, the envelope of SEK 700 billion has been set on the basis of total purchases of government bonds, covered bonds and municipal bonds; for treasury bills and commercial paper, it is set on the basis of holdings.

*)Total volume utilised is affected by the fact that the Riksbank’s holdings of commercial paper are SEK 0 billion, compared with the offer to hold up to SEK 32 billion within the envelope.

 

Extended purchases of securities

The Riksbank intended 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 aim was to facilitate credit supply and mitigate the downturn in the economy. This included purchases of government bonds, treasury bills, covered bonds (mortgage bonds), municipal bonds and corporate securities (commercial paper and corporate bonds). 

The Riksbank’s extended purchases of securities

Summarising information about the Riksbank’s purchases of securities

Purchases of government bonds

Read more about the Riksbank's purchases of government bonds

Purchases of treasury bills

Read more about the Riksbank's purchases of treasury bills 

Purchases of covered bonds (mortgage bonds)

Read more about the Riksbank's purchases of covered bonds

Purchases of commercial paper

Read more about the Riksbank's purchases of commercial paper

Purchases of corporate bonds

Read more about the Riksbank's purchases of corporate bonds

Purchases of municipal bonds

Read more about the Riksbank's purchases of municipal bonds

 

 

Eased collateral requirements when borrowing from the Riksbank

The Riksbank eased the requirements regarding the collateral the banks can use when borrowing from the Riksbank. The reason was that the banks’ access to liquidity in Swedish krona might need strengthening in connection with the coronavirus pandemic. The collateral requirements that were in place before the corona pandemic will be reintroduced in January 2022.

Read more on the page Collateral

 

 

Funding to banks to support corporate lending

The Riksbank offered funding to banks of up to SEK 500 billion against collateral to stimulate their lending to banks to support corporate lending. The programme has been terminated.

Read more about the Riksbank’s funding for lending programme

 

 

 

Loans in US dollars

The Riksbank offered the banks the possibility of loans in US dollars against collateral, up to a total of USD 60 billion. The purpose was to increase access to liquidity in US dollars in the Swedish financial system. The programme has been terminated.

Read more about the Riksbank's measure to offer loans in US dollars

 

 

The riksbank is lending unlimited amounts of sek against collateral

The Riksbank offered banks the opportunity to borrow an unlimited amount of money on a monthly basis against collateral at three and six months’ maturity respectively to the repo rate. This was to facilitate their financing and safeguard their role as credit suppliers to Swedish companies. The programme has been terminated.

Read more about the monthly market operations at longer maturities in kronor

 

More banks and credit institutions have the possibility to borrow money from the Riksbank

The Riksbank granteds Swedish credit institutions under the supervision of Finansinspektionen the opportunity to become temporary monetary policy counterparties to the Riksbank. Also temporary monetary policy counterparties were given the opportunity to participate in the programme for lending to non-financial companies via banks. The opportunity to become a temporary monetary policy counterparty has been removed.

Read more about temporary monetary policy counterparties

 

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Updated 30/06/2022