Riksgälden; Swedish National Debt Office Takes Position For Stronger Krona

The Swedish National Debt Office will increase the share of foreign currency debt, with the aim of reducing the costs of central government debt. This was decided on by the board of the Debt Office on Tuesday. The decision means that we take a position for a stronger krona.

The position, which will be created by the Debt Office buying Swedish kronor versus euro, will amount to at most SEK 15 billion and will be built up gradually until the end of the first quarter of 2009.

The krona has weakened sharply during the autumn and is now historically very weak. In our view, the krona exchange rate is far from the levels that can be justified by more fundamental conditions. It should therefore be possible for it to strengthen considerably over time. By increasing the foreign currency share when the krona is weak and reducing it again when the krona has strengthened, we can reduce the costs of the central government debt.

According to the Government's guidelines, 15 per cent of the total debt shall consist of foreign currency debt. The Government has also given the Debt Office the right to take positions in Swedish kronor in relation to other currencies up to a maximum of SEK 15 billion. These positions may be taken when the krona deviates from what appears to be a long-term reasonable value. The positions shall be built up gradually within the framework of a programme announced in advance.

The Debt Office has taken positions three times previously based on the assessment that the krona was sharply undervalued. This took place by our temporarily reducing the pace of repayment of foreign currency debt. Now that the foreign currency share is at the level specified as desirable by the Government, we are creating this position in another way, although the intention remains the same: to keep down the costs of central government debt.

For further information, please contact: Bo Lundgren, Director General, +46 8 613 46 51 Thomas Olofsson, Head of Funding, +46 8 613 47 82

This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.

Riksgälden

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Stock Identifier: SSE.RIKS