The European Central Bank and Sveriges Riksbank have both criticised Swedish government proposals that could cut the country’s foreign exchange reserves in half.

The draft law would require the Riksbank to pay back the Skr257 billion ($29.5 billion) it has borrowed from the government to finance its foreign exchange reserves – amounting to around half its total reserves. In future, the central bank would only be able to borrow up to Skr50 billion, and that only with the government’s permission