Large tax payments and F-loans to banks
The objective of Norges Bank’s liquidity policy is to keep short-term money market rates close to the policy rate. Norges Bank achieves this by managing the total amount of liquidity in the banking system. In the coming weeks, structural liquidity in the banking system will be very low due to large tax payments to the government. Uncertainty about the size of these tax payments and the level of banking system liquidity has resulted in substantial volatility in short term money market rates.
To increase the predictability of banking system liquidity, Norges Bank will offer fully allotted F-loans at a fixed rate with one-day maturities from today until 14 October 2022. This offer will be extended if the situation so warrants. The F-loans are in addition to ordinary market operations in accordance with the structural liquidity forecast. The interest rate on these F-loans is the policy rate plus 10 basis points. The deadline for submitting tenders is 4:10 pm. The F-loans will be announced on the same day as they are settled. Any surplus liquidity resulting from these F-loans will not be withdrawn from the banking system.
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