Sweden central bank to make losses amidst rising interest rates

Mostly Economics

I had pointed to how Reserve Bank of Australia has made losses this year.

Sweden’s central bank joins the Australian central bank. Sweden central bank Deputy Governor Martin Flodén in this speech discusses the impact of rising interest rates on the central bank:

Calculations indicate that the purchases of government bonds may have reduced government borrowing costs by approximately SEK 15 billion during 2015-2022. But interest rates are now rising rapidly, and this means that the value of the assets we have purchased falls. Like many other central banks, the Riksbank will therefore in all probability report a large financial loss for 2022, and our equity may become negative as a result. “This may lead to the Riksbank having to request capital injections from the Riksdag. There is a risk that this may affect the Riksbank’s financial independence in the future. Another risk is that market participants will begin…

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