The Debt Office proposes a further extension of the maturity of the central government debt

29 September 2017 - Press release

The maturity of Sweden’s central government debt should be extended further as the cost advantage of short-term borrowing has decreased. This is the assessment of the Swedish National Debt Office in its proposed guidelines for debt management.

The cost advantage of short-term borrowing has decreased and, as in last year´s proposed guidelines, the Debt Office therefore proposes an extension of the maturity of the nominal krona debt by 0.3 years. A longer maturity means smaller variations in the cost of government debt. For the inflation-linked krona debt and the foreign currency debt the Debt Office proposes no changes in the maturity.

The Debt Office also proposes abolishing the present benchmark of SEK 70 billion for the nominal krona debt with maturities of more than twelve years. Instead, a common maturity measure for the nominal krona debt should be introduced. With the proposed extension of the maturity by 0.3 years the maturity interval for the nominal krona debt should be 4.3–5.5 years. The proposed change only applies to the steering of long bonds. The Debt Office shall continue to issue long bonds to limit refinancing risk.

The Debt Office has previously investigated whether the evaluation of the overall objective for management of the central government debt could be facilitated and proposed new cost and risk measures for use in the evaluation. In order to improve the link between the guidelines for management of the central government debt and evaluation, the Debt Office proposes wording to clarify that the new cost and risk measures proposed in the evaluation are also to be applied according to the guidelines.

Central government debt management – proposed guidelines 2018–2021

Government decision on guidelines in November

The Debt Office shall propose guidelines for central government debt management to the Government no later than 1 October. The Government gives the Riksbank the opportunity to comment on the Debt Office´s proposal before it adopts new guidelines no later than 15 November.

Contact

Robert Sennerdal, Press Secretary, +46 (0)8 613 46 94