OSLO: With an $850 billion wealth fund as a backstop, the nation has had a limited need to issue bonds, leaving the level of outstanding debt potentially too small for purchases. That means launching a QE program would probably be the last measure its central bank would turn to as it seeks to avoid a recession amid low oil prices.
“If the interest rate weapon is used up, maybe they would try aiming directly for the krone,” said Kari Due-Andresen, chief economist at Svenska Handelsbanken AB. “I don’t know how much traction they would get from buying bonds in Norway, it’s hard to say if it would be a credible strategy due to the small size of the market.”
