As of 24 March. Please note this section is being continuously updated.
Interest rates
- On 12 March, the central interest rate (the "policy" rate" was decreased with 0.5 ppts from 1.5% to 1%
- On 20 March, it was decreased further, with 0.75 ppts, to 0.25%, effective as of 23 March 2020
- The policy rate is the interest rate banks receive on deposits up to their individual quotas in Norges Bank, also referred to as the sight deposit rate. The sight deposit rate has been the policy rate since June 1993
Capital buffer
- On 12 March, based on advice from Norges Bank, the Ministry of Finance also decided to reduce the countercyclical capital buffer for banks from 2.5% to 1%.
F-loans
- An F-loan is the primary instrument used to provide liquidity to the banking system. Norges Bank reduces the quantity of reserves in the banking system by providing banks with F-deposits
- To ensure that the policy rate passes through to money market rates, Norges Bank also decided on 12 March to offer extraordinary three-month F-loans to banks for as long as deemed necessary.
- The F-loans will be fully allotted
- On 19 March, the policy was extended to offer additional extraordinary NOK F-loans
- The extraordinary F-loans will have a maturity of one week, one month, three months, six months and twelve months
- This setup seems similar to Sweden's, with the banks bearing all counterparty risk and setting the loan terms themselves
Link to the official policy rate website
https://www.norges-bank.no/en/topics/Monetary-policy/Policy-rate/Key-policy-rate-Monetary-policy-meetings-and-changes-in-the-policy-rate/