Risks to the Upside for Money Market Premiums as Liquidity Shrinks

Norges Bank's certificate issuance is tightening liquidity levels, driving up money market premiums. Analysts expect further upside in these premiums as liquidity approaches multi-year lows.

Key Takeaways

• 1.Norges Bank's certificate programme is driving liquidity to its lowest level since 2024, causing upward pressure on money market premiums.
• 2.While the market is more robust than during the 2022 liquidity stress events, structural liquidity scarcity leaves premiums vulnerable to shocks.

Table of Contents

• Risks to the upside for money market premiums as liquidity shrinks
• Petroleum tax payments are more frequent
• Bank's willingness to take up F-loans and redistribute liquidity
• NOK LCR is more 'robust' for some banks
• Non-banks and central bank certificates