The Riksbank and prompted a short-lived SEK rally as it asked the Swedish Debt Office to consider phasing out the debt currency exposure at a slower pace. Economists at ING analyze Krona’s outlook.

Riksbank steps up FX protest

The Debt Office is planning to bring its debt FX exposure to zero by end-2026: quite a long period for a relatively small residual amount, meaning the impact on the Krona should be negligible.

Even the Riksbank seemed to acknowledge the limited direct implications on the exchange rate but lamented how the debt office is selling SEK while the Riksbank is buying SEK.

The first set of data on the RB's hedging operations is due at the end of this week or next, and will tell us whether – as we are inclined to think – the Riksbank is buying more SEK at higher USD/SEK/EUR/SEK.

The Riksbank seems to have lost some grip on the market with FX operations, and both pairs may grind higher in the unstable risk environment.