To ensure the transmission of the policy rate and foster well-functioning markets, Norges Bank has since March offered banks extraordinary F-loans. Financial markets are now functioning more normally, and money market premiums have declined. The period for extraordinary NOK F-loans will be extended to the end of 2020. One extraordinary F-loan with three-month maturity will be offered each month from September until year-end (see updated auction calendar). The interest rate on the loans will be the prevailing policy rate plus 15 basis points.

Moreover, the following conditions apply to extraordinary F-loans offered after 26 August 2020:

• All extraordinary F-loans will be fully allotted. All banks will receive the desired volume at the announced interest rate. The same collateral requirements will apply as for ordinary F-loans.
• Norges Bank will continue to aim to keep central bank reserves (banks’ unrestricted bank deposits at the central bank) overnight at around NOK 35 billion (with a target range of plus/minus NOK 5 billion).
• Surplus liquidity will be withdrawn from the banking system using daily F-deposits with one-day maturity. Banks can then draw on the liquidity from the extraordinary F-loans on a daily basis.

Norges Bank is continuously monitoring market developments and may change its offerings of extraordinary F-loans at short notice if market conditions so warrant.