News 28 June 2021
Swedish government agencies’ liquidity management in foreign currency is continually improving. Since 2017, the Swedish National Debt Office has offered a multi-currency cash pool (MCCP) solution. This, in combination with better pricing under the central government framework agreements for cross-border payments, has enabled lower costs for agencies’ payments in foreign currency – and thereby for the central government as a whole.
The Swedish Pensions Agency and the Swedish International Development Cooperation Agency (Sida) are two of 15 agencies participating in the Debt Office’s MCCP, and the process of agencies joining the MCCP continues.
The way in which liquidity management is conducted and the benefits it provides are presented in Debt Office Commentary 1 – 2021. The Debt Office Commentaries are a series of short essays in which Debt Office employees contribute to furthering awareness and knowledge of a relevant topic.
In this Commentary, Saša Pantic, Cash Management Specialist, and Tord Arvidsson, senior economist at the Debt Office’s Economic Analysis department, present how the MCCP functions within the framework of the Swedish state’s payment model.
They describe how the agencies can make payments in foreign currency, how the costs of currency exchanges have been able to be reduced, and the steps that the Debt Office takes in managing the currency risk involved in the agencies’ international payments.
Centralising currency payments for the central government at the Debt Office enables the savings potential made possible by the MCCP to be realised. The central government’s costs for currency exchanges are reduced as currency payments from agencies are netted against currency payments within central government debt management.
Debt Office Commentary: More efficient management of Swedish government agencies' international payments