Swedish Krona Rallies on Central Bank's Hawkish Plan to Sell Bonds

سوئد currency strengthened after its central bank surprised the market with an initiative to sell government bonds.

The Riksbank plan to shrink its balance sheet by actively selling down bond holdings puts it among the most aggressive central banks in embracing quantitative tightening, or QT.

The بانک انگلستان is doing similar. The Federal Reserve has been reducing its balance sheet more passively, by allowing the securities it holds to mature without replacing them.

The Riksbank will sell 3.5 billion krona, equivalent to around $330 million, of government bonds a month, starting in April.
It also raised interest rates by 0.5 percentage point.
The krona appreciated 2.8% against the dollar and 2.3% against the euro.
سوئدی bonds sold off, with the benchmark 10-year yield rising more than 0.2 percentage point to 2.265%.
"It was a hawkish surprise," said متس هایدن, an interest-rate strategist at بازارهای نوردیا. Investors were expecting the rate increase, but broadly didn't anticipate QT, he said.

آقای. هاید said the monthly selldown was roughly double the size of typical bond issuance by the government's debt office.

"If you look historically, this is a very sharp change," he said.