Currency exchanges for a self-financed foreign exchange reserve
The Riksbank is implementing currency exchanges of Swedish kronor (SEK) to euros (EUR) and US dollars (USD), with the aim of attaining a robust, long-term financing of the foreign exchange reserves. On the first Monday of each month, we report the previous month’s exchanges.
The FX reserves are currently financed in two different ways: partly through the Riksbank’s own financing, which comprises of equity, banknotes and coins issued and deposits from the banks, and partly through loans in foreign currency on the international capital market via the Swedish National Debt Office. In January 2021, the Riksbank decided to replace the borrowed part of the FX reserves with self-financing via deposits from banks. This involves the Riksbank exchanging SEK for USD and EUR. In total, the Riksbank will exchange SEK for USD 14.5 billion and EUR 5.5 billion.
Exchanges being implemented at an even pace
The exchanges began on 1 February 2021 and are being carried out at a steady pace. In February 2022, the Riksbank decided to bring forward the date for when the exchanges will be complete, to 31 December 2022 instead of 31 December 2023. This means that the exchanges from 7 February onwards will be made at a faster pace than before.
The exchanges are spread out evenly over time and made in relatively small amounts to give them the smallest possible effect on the foreign exchange market and the krona exchange rate. This is because the exchanges fulfil no monetary policy purpose and are thereby not being conducted to affect the krona exchange rate. The exchanges shall be carried out with due caution and taking market conditions into consideration. This means that the volumes can vary on individual dates, even though the Riksbank will endeavour to attain an even rate of exchange every month. The exchanges take place at the prevailing exchange rate.