Guidelines for central government debt management in 2025
Published
Today, the Government adopted new guidelines for the Swedish National Debt Office’s central government debt management in 2025. The Swedish National Debt Office will continue to issue inflation-linked bonds, but the outstanding volume will be reduced. The aim is inflation-linked debt of around SEK 80 billion by the end of 2029. In addition, from now on, the central government debt’s term to maturity will be measured in average time to refixing (ATR).
Since there is no clear and consistent cost advantage to borrowing in inflation-linked bonds as compared to in fixed-rate bonds, the outstanding volume of inflation-linked bonds will be gradually reduced. The aim is to bring inflation-linked debt down to around SEK 80 billion by the end of 2029. Moreover, given the low level of central government debt, it is difficult to maintain a good liquid secondary market for both fixed-rate and inflation-linked bonds. There is therefore reason to prioritise borrowing through fixed-rate bonds rather than inflation-linked bonds.
Another change is that the central government debt term to maturity will now be measured in ATR rather than Macauley duration. ATR is not affected by changes in the market interest rate, which means it allows more stable management. The central government debt term to maturity of 3.5–6 years will be maintained.
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