“It is particularly pleasing during such a turbulent year to have succeeded so well by making use of the weak dollar prior to the summer,” said the head of Debt Office’s foreign currency operations, Bengt Rådstam, in a statement.
“We were convinced that it would not be possible to sustain such a weak dollar. The strong demand for the dollar in the wake of the crisis also aided a significant strengthening of the dollar, which was more rapid than we had expected.”
The gains reduced the costs of the government’s interest burden, which amounted to 33 billion kronor in 2008, according to the Debt Office.
In mid-2008, the Debt Office’s board implemented a new strategic foreign exchange position based on a strengthening dollar, was at the time was weak in relation to the euro.
When the position was taken, the dollar was trading at $1.58 per euro, and when the Debt Office closed its position, the US currency had strengthened to $1.26 per euro.
In addition, the Debt Office reported that its active management of foreign currency holdings yielded gains of 500 million kronor in 2008.