Taxpayers gain SEK 8.1 billion from The Debt Office's active borrowing

29 June 2011 - Press release

During the financial crisis, the Debt Office considered the Swedish krona to be unreasonably weak. In the course of 2009, we therefore shifted a large part of the borrowing, equivalent to SEK 50 billion, to foreign currency. This additional foreign currency exposure has now been wound up. Our active management of the central government debt has generated a profit of over SEK 8 billion.

The profit is due to the krona appreciating considerably as we expected. We have thus had to repay a smaller amount than we would have done if the debt had been in kronor.

- If we had not made use of this possibility, there would have been a risk of borrowing being unnecessarily expensive. Our goal is to borrow as cheaply as possible without taking excessive risk. To achieve this, we have to be active in our central government debt management. We continuously monitor interest and exchange rate movements and try to take advantage of possibilities that arise, says Bo Lundgren, Director General of the Debt Office.


The krona weakened during the international financial crisis in 2009 to levels around SEK 11.50 against the euro. At the same time, the Debt Office needed to borrow large volumes to fund existing and expected deficits. We considered that this lending would be unnecessarily expensive if it was concentrated on the Swedish krona market.

We therefore gradually increased our exposure to foreign currency from January 2009 onwards. In May 2009, the government approved a further increase in our exposure from SEK 15 to SEK 50 billion. The build-up of this position was completed by the end of 2009.

The intention was to repay the foreign currency when the krona had strengthened. There were good reasons for this: the weakening of the krona was not due to domestic problems but mainly because of a fall in demand for exports and concern about the consequences for the Swedish economy of the crisis in the Baltic countries. We made the assessment that the exchange rate for the krona would return to normal levels when the global economy recovered and the situation in the Baltic economies had become clearer.

The technique

The large exposure in foreign currency was achieved mainly with the aid of currency forward contracts where we purchased kronor for euro. This exposure was built up at an average exchange rate of around SEK 10.70 against the euro.


On average, we closed the exposure at an exchange rate of around SEK 9 against the euro. We started winding up the position in September 2010 and all forwards have now been closed.

For more information, please contact:

Bo Lundgren, Director General of the Debt Office, telephone +46 8 613 46 51.

Thomas Olofsson, Head of Debt Management, telephone +46 8 613 47 82.