The dollar has a dominant position in the global financial system. It is the largest in all savings in the world and the primary currency when it comes to transactions in the world economy.
Sweden is "dollar-dependent"
But the dollar's position is now being threatened - by concerns about problems with the US's gigantic national debt and rapidly rising long-term interest rates. The American economy is also being threatened by lower growth and higher inflation in the wake of the Trump administration's tariffs.
This can create problems in Sweden, warns Erik Thedéen:
Sweden has a dollar-dependent financial system.
The dollar exposure is large both within banks and companies. And the Swedish currency reserve also consists largely of dollars, according to Thedéen.
With this, funds that are hit by large withdrawals are pointed out as the primary risk factor in the Swedish Central Bank's first stability report for this year. Fund withdrawals can namely in the next step create financing problems in the Swedish real estate sector - where funds together with banks play a completely crucial role.
According to Olof Sandstedt, head of the department for financial stability at the Swedish Central Bank, the fund outflow in April was the largest during a single month since the pandemic - when the Swedish Central Bank was forced to intervene with support purchases
Swedish households have approximately one-fifth of their shares and funds in dollars, which means that it became a fairly large wealth shock for some households when the US stock exchanges plummeted during President Donald Trump's tariff shock in the spring, according to Sandstedt.
Disruptions can spread quickly
Swedish banks also have a lot of lending in dollars, when they draw in money and build up buffers. And it also requires dollars when pension and life insurance companies need to hedge their positions.
It is very important that banks continue to get hold of dollars, says Sandstedt.
The Swedish Central Bank notes in the report that the prevailing uncertainty regarding trade and security policy means that the risk of sudden and unforeseen events is high.
"In a global and interconnected financial system, disruptions can quickly spread and have far-reaching consequences", writes the Swedish Central Bank.
The starting point for Sweden is assessed as good - with stable public finances and strong banks. But several structural vulnerabilities remain, such as highly indebted households and commercial property companies.
