In order to safeguard the financial stability in Sweden, Swedish central bank, Riksbank’s Executive Board has decided to borrow €3 billion from the European Central Bank (ECB). Riksbank is borrowing up to €10 billion in exchange for Swedish kronor under the swap agreement it had earlier, with the ECB.
Riksbank has earlier requested to borrow the equivalent of SEK100 billion in foreign currency from the Swedish National Debt Office to restore the foreign currency reserve and SEK65 billion of this will be borrowed prior to the summer.
One of the Riksbank’s tasks is to ensure that the payment system in Sweden works safely and efficiently. An important component of this work is to be able to provide liquidity assistance to the Swedish banks. As a substantial part of the Swedish banks’ funding is in foreign currency, the Riksbank needs to have a sufficiently large foreign exchange reserve to be able to meet a potential need from the banks.