Norges Bank is buying 250mill NOK/day to balance the budget, whereas actual petroleum tax payments should have led to 750 mill/day of sales. Until the central bank changes gears, we will see higher Nibor and a stronger NOK, as reported by economists at Nordea.

The August Budget vs. reality

“Norges Bank announced in late December that they will buy 250 million NOK/day in January. This decision seems to us to be based on the very outdated 2022 budget from August 2021. Gas prices have come a long way since then.” 

“Using updated data, the right decision would have been for the central bank to instead sell NOK at around 750 million/day.” 

“Until Norges Bank turns around, we will see tighter structural liquidity, higher Nibor, and a stronger NOK.”