The Riksbank said some coronavirus impact was unavoidable and that while its quantitative easing programme has ensured there is liquidity in the financial system, that could change. “The Board’s judgement is that the Riksbank’s balance sheet should not, if nothing else, decrease in the coming year,” Governor Stefan Ingves told parliament’s finance committee. If more is needed, the Riksbank could offer more generous terms for loans to banks or purchase securities directly. The Riksbank already holds around 45% of the outstanding stock of Swedish government debt, so it would probably need to widen the pool of assets it buys if it were deemed necessary to expand its balance sheet.
- Reuters -