Guidelines for central government debt management in 2023
The Government adopted guidelines for the Swedish National Debt Office’s national debt management. The guideline decision for 2023 amends the steering of national debt composition to gradually phase out national debt foreign currency exposure, with a target value of zero from 2027. Progress will be evaluated against a constant rate of reduction for the period 2023–2026. Furthermore, the reporting of private market borrowing results will cease.
In the guideline decision for 2023, the Government decided to phase out national debt foreign currency exposure because it entails higher risk without providing systematic cost benefits. National debt foreign currency exposure will be gradually phased out from the beginning of 2023 until the end of 2026, with a target value of zero from 2027. The decision to gradually phase out foreign currency exposure over a four-year period is based on weighing up the cost benefits and the risks associated with the length of the period. Progress in phasing out national debt foreign currency exposure will be evaluated against a constant rate of reduction for the period 2023–2026.
A minor amendment proposes that the reporting of private market borrowing results will cease. Since the last premium bonds matured in December 2021, the Government considers that the reporting of cost savings from private market borrowing can cease.
Otherwise there will be no changes to the composition of the national debt, which is to be steered towards the following:
- inflation-linked krona debt to be 20 per cent of the national debt in the long term;
- nominal krona debt to constitute the remainder of national debt; and
- maturity (in terms of duration) of the national debt is to be steered towards 3.5 to 6 years.
The objective of national debt policy is to manage central government debt so as to minimise the long-term costs of the debt, while taking into account the risk associated with management. The debt is to be managed within the framework of monetary policy requirements.
The Government and the Swedish National Debt Office share responsibility for achieving this objective. The Government steers the overall risk level in annual guideline decisions, while the Swedish National Debt Office is responsible for ensuring that borrowing and management remain within the framework of the guideline decisions and in accordance with the objective. Annual guideline decisions are based on the Swedish National Debt Office’s proposed guidelines, among other things.
A report on progress towards the objectives is presented to the Riksdag every two years in the form of a written communication. The last resport was presented to the Riksdag on 21 April 2022.