Credit strategist Lars Mouland believes that the US’s announced borrowing combined with a possible interest rate hike from Norges Bank will cause the Norwegian interest rate to rise.
“The US Treasury Department has announced major borrowing in the new budget agreement signed by Trump on Friday. This will push up borrowing costs in the country and lead to higher interest rates in the Norwegian money market,” says Nordea’s credit strategist Lars Mouland to E24.
“When it comes to the peak of a rate hike in September, which we see as very likely, it could bring a money market rate to Norway close to two percent already in September,” Mouland told the newspaper.
However, SpareBank 1 Markets’ head of credit analysis, Pål Ringholm, is a little more expectant than Mouland.
“None of us have the facility, but there is room for that to happen. Nevertheless, there is so much else that can happen at the same time in the market that it is difficult to just take one effect,” says Ringholm to E24.
© NTB Scanpix / #Norway Today