Central government debt management in 2015

22 February 2016

The Debt Office today submits its basis for evaluation of the central government debt management in 2015, a year characterized by negative interest rates, a reduced budget deficit and deteriorated liquidity in the markets for government securities.

The report from the Debt Office is part of the Government’s evaluation of the central government debt management. The overall objective of the management is to minimise the long-term cost of the debt without taking on too much risk.

The year in brief

  • The cost of the debt decreased as interest rates in general fell. In 2015, the Debt Office sold government bonds at an average yield of 0.48 per cent, a decline from 1.35 per cent in the previous year.
  • The Debt Office sold government securities at a negative yield. The government bond that matures in March 2019 was sold at an average yield of –0.16 per cent. The Debt Office also borrowed at negative yields through T-bills and commercial paper.
  • Two new lottery bonds were sold at a loss because the yields of the corresponding government bonds were negative. The Debt Office’s other savings product for individuals was closed as planned during 2015.
  • Market participants said in a survey that the liquidity of the government securities markets deteriorated during the year. The reasons given were regulations, low interest rates and the Riksbank buying government bonds.
  • The need for market support activities increased as the Riksbank started buying government bonds. Demand for the Debt Office’s repos increased during the second half of the year.
  • The central government budget deficit more than halved. The net borrowing requirement – the budget deficit – shrank to SEK 33 billion in 2015 from SEK 72 billion a year earlier. Strong economic growth led to unexpectedly large tax income.
  • The Debt Office paid down the foreign-currency debt. As a step in the Government’s decision to gradually reduce the foreign-currency exposure of the debt, the Debt Office bought JPY 318 billion, corresponding to SEK 22 billion.

Confidence in Debt Office remains high

Since 2004, TNS Sifo Prospera conducts an annual survey among the Debt Office’s primary dealers and investors. The result of the survey in 2015 shows that confidence in the Debt Office remains at a high level. As previously, the Debt Office was ranked highly for its transparency compared with international peers.

Basis for evaluation – central government debt management in 2015, pdf (in Swedish)

The report will be available in English shortly on the Debt Office’s website.

Contact

Göran Robertsson, Senior Analyst, +46 (0)8 613 46 06
Linda Rudberg, Press Officer, +46 (0)8 613 45 38