Enterprises fund their activities partly by borrowing from financial undertakings and partly by issuing bonds, notes and short-term paper
. Whether bonds, notes and short-term paper
should be classified as fixed-rate loans is debatable, but the majority of these loans are usually extended with a fixed coupon rate.
In millions of NOK 30.06.2004 30.09.2004 31.12.2004 Cash 4 633 4 390 4 649 Deposits with Norges Bank 18 046 29 768 37 017 Deposits with Norwegian banks 32 390 21 230 18 383 Deposits with foreign banks 54 376 25 867 27 174 Treasury bills 7 280 5 074 6 451 Other short-term paper
13 626 11 759 8 429 Government bonds etc.
Analysts said tendency of banks to park money into short-term papers
indicated the persistent monetary tightening policies in times to come.
Experts highlight NIMs also include income from investments, where banks have moved towards short-term papers
during 2017, offering lower yields than long-term bonds.
The rise in yields, however, has a limited impact upon schemes that invest in short-term papers
. That is why returns from liquid and ultra short-term funds have not been affected much.
Portugal and Greece have continued to go to the market to sell short-term papers
during their bailout programmes.
Analysts believe the renewed interest in short-term papers
to be a sign of heightened expectations of continuing aggressive rate reversals by the SBP, especially as inflation continues gather pace along with fears of another potential devaluation in in the coming months on the cards.
The rate would be aligned with other short-term papers
issued by NBAD, such as Euro-CP or London CD.
The European Financial Stability Facility (EFSF) has sold just under 2 billion worth of three-month bonds in its first ever auction of short-term papers
ever in a bid to raise extra cash to fund its bond buying and new lending programmes.