Norges Bank

Staff Memo

Bond market fire sales and turbulence in the Norwegian FX market in March 2020

Ragna Alstadheim, Kjell Bjørn Nordal, Olav Syrstad, Saskia Ter Ellen and May-Iren Walstad Wassas
Staff Memo


The world witnessed a meltdown in financial markets in March 2020 as the Covid-19 pandemic hit the global economy. In this memo we document how the turbulence affected Norwegian financial markets. We describe possible mechanisms behind the stress in the Norwegian foreign exchange and bond markets, and how policy measures were used by Norges Bank to alleviate market frictions.

Staff Memos present reports and documentation written by staff members and affiliates of Norges Bank, the central bank of Norway. Views and conclusions expressed in Staff Memos should not be taken to represent the views of Norges Bank.

ISSN 1504-2596 (online)

Published 29 January 2021 09:00
Published 29 January 2021 09:00