RTTNews - Wednesday, the Executive Board of the Riksbank decided to restore the foreign currency reserve levels by borrowing SEK 100 billion. The central bank intends to borrow the foreign currency through the National Debt Office, Riksbank said in a statement.
The central bank has to ensure that the payment system in Sweden works safely and efficiently and should be able to provide liquidity assistance to the banks in crisis situation. Riksbank must have a sufficient reserve of foreign currency to be able to meet the needs of the banks when necessary.
The Riksbank needs to borrow as it has lent US dollars to Swedish banks and also increased commitments to other central banks and international organizations like IMF.
Riksbank Governor, Stefan Ingves said, We still need to be prepared for the eventuality that the financial crisis may be both severe and prolonged. This is why we need to strengthen the foreign currency reserve.
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