Press release 15 November 2007
Ministry of Finance

Guidelines for Central Government Debt Management in 2008

The Government today decided the guidelines for central government debt management for 2008-2010. For 2008 the amortisation rate for the foreign currency debt is to be SEK 40 billion. The Debt Office has a mandate to deviate from the amortisation rate by SEK ±15 billion.

The guidelines for central government debt management should be seen in the light of a continuation of robust public finances and an expected decline in the central government debt of over SEK 500 billion from 2006 to 2010. This provides the Debt Office with the scope to manage the debt more actively in order to reduce central government borrowing costs, says Mats Odell, Minister for Local Government and Financial Markets.

The Government, with the guidelines decision, supports the Debt Office's ambition to review the composition of the foreign currency debt with a view to reducing its costs. Otherwise the decision on the guidelines for 2008 leaves the central government debt policy unchanged.

The guidelines control how the central government debt is to be allocated to loans in foreign currency, loans protected from inflation (inflation-linked debt) and loans in krona as well as what maturity the debt is to have. The long-term target for the debt's composition has been set at 15 per cent for the foreign currency debt, 25 per cent for the inflation-linked debt and 60 per cent for the nominal krona debt. The target remains unchanged from this year's target as does the Debt Office's remit to review the analysis underlying the composition of the debt.

The benchmark for the maturity of the central government debt at the end of 2008 has been set at 4.8 years. The aim for 2009 and 2010 is 4.6 and 4.5 years respectively. The maturity is gradually decreasing as outstanding inflation-linked bonds near maturity.

The Government decides guidelines for central government debt management after it receives proposals from the Debt Office. The Debt Office is responsible for the operational management of the central government debt within the framework of these guidelines. The general goal of central government debt policy is to minimise the long-term cost of the debt with due consideration for risk.