May 31, 2017 / 12:23 PM / 2 months ago

Swedish c.bank's Skingsley says reducing FX-reserve increases risk

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STOCKHOLM, May 31 (Reuters) - The central bank's foreign currency reserve is part of Sweden's economic defence and the government's proposal to reduce the reserve will lead to increased risk, central bank Deputy Governor Cecilia Skingsley said on Wednesday.

"Allowing this to happen in a situation where the banking sector is growing and its dependence on foreign currency is also increasing is to say the least a risky venture," she said.

Skingsley also said the Swedish banks should manage their own liquidity risks, securing the sufficient liquidity reserves and stable funding in foreign currency.

Reporting by Stockholm Newsroom

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