NOK to strengthen until Norges Bank realizes the error of current 2022 budget – Nordea
|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 This decision seems to us to be based on the very outdated 2022 budget from August 2021.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.”
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