Guidelines for central government debt management 2023

The starting point for the Swedish Government’s guidelines decision is the objective of central government debt policy adopted by the Riksdag (Swedish Parliament). The objective is that central government debt shall be managed so as to minimise the long-term cost of the debt while taking the risk associated with its management into account, and within the framework of the requirements of monetary policy.

Central government debt has decreased as a share of GDP (gross domestic product) in 2022 and 2021. After having increased temporarily in 2020, signs of a return to the previous trend of declining central government debt and declining borrowing requirement are now being seen. The surpluses in the central government budget continue to reduce the borrowing requirement. Central government debt is expected to continue to decrease in 2023.

The guidelines decision for 2023 makes the following changes in the steering of debt management compared with the preceding year.

• Central government debt’s foreign exchange exposure is to be gradually phased out with the guideline value being zero as of 2027. This is based on the National Debt Office’s analysis and review of what long-term foreign exchange exposure should look like, finalised in this year’s guidelines proposal.
• The phasing out of the foreign currency exposure of the central government debt is to be evaluated in relation to a steady pace of reduction over the period 2023–2026.
• The results of retail market borrowing will no longer be reported.

Otherwise, there are no changes in the composition of central government debt which is to be steered towards the following:

• Inflation-linked krona debt – it is to be 20% of the central government debt in the long term.
• Nominal krona debt – it is to make up the remaining share of the central government debt.
• The term to maturity (in terms of duration) of the central government debt is to be steered towards 3.5–6 years.

The Debt Office’s proposed guidelines, among other factors, formed the basis for this guidelines decision. The Riksbank has provided its opinion on the Debt Office’s proposal and has raised no objections. The Government’s guidelines decision for 2023 is in line with the Debt Office’s proposed guidelines.