Longer duration of central government debt

10 November 2016

Today the government decided on guidelines for management of the central government debt in 2017. The decision means that the debt duration is to be 0.3 years longer, in accordance with the Debt Office’s proposal.

The extension of the duration is based on the assessment that the cost advantage of borrowing in the short term has decreased. By extending the maturity, the risk in terms of cost variation is reduced.

The guidelines decision clarifies that the Debt Office may take positions, not only to lower the cost of central government debt, but also with a view to reduce risks. The mandate for positions in the krona exchange rate is left unchanged at SEK 7.5 billion.

According to the Debt Office’s proposal the target perspective for retail market borrowing is extended so that lottery bond borrowing can be retained. The base for that decision is that this form of borrowing is expected to be profitable again once interest rates rise. However, until then the Debt Office should consider not issuing lottery bonds.

Press release from the government

The Debt Office’s proposal

Contact

Robert Sennerdal, press officer, +46 8 613 46 94