STOCKHOLM, April 28 (Reuters) - Swedish central bank said on Friday it opposed a government proposal to reduce the foreign exchange reserve because it might not have sufficient buffers to deal with a future financial crisis.
“Sweden has a large and expanding cross-border banking sector with major commitments and funding in foreign currency,” the central bank said in a statement.
“This poses significant risks to financial stability and ultimately to the national economy”, the bank said in a statement.
In mid-March, the Swedish minority government said Riksbank’s currency reserve will be limited to 200 billion crowns, below the current level of around 457 billion, although it will have the ability to borrow up to 50 billion crowns more if it sees the need. (Reporting by Johan Sennero; Editing by Simon Johnson)