Norges Bank announced last afternoon 3 months F-loans at an unlimited amount. Earlier, analysts at Nordea have called for immediate measures to calm down the stress in the Norwegian Moneymarket. EUR/NOK trades 11.266 after falling overnight.
Key quotes
“The F-loan was annonced after yesterday’s fix and means banks now can post a wide range of collateral in return for 3M liquidity at the policy rate.”
“F-loan will also impact Nibor. Banks could borrow at the policy rate, receive NOK for 3M months and sell NOK vs USD in the 3M fx swap to invest in 3M USD Agency paper. All Level 1 assets. This would increase the banks balance sheets.”
“The first F-loan auction is tomorrow. We’ll examine the uptake and the reaction in credit markets closely.”
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