OSLO (Reuters) - Norway's central bank has increased its planned issuance of government bonds this year to between 70 billion and 85 billion Norwegian crowns ($6.68 billion-$8.11 billion) from an original plan of 55 billion crowns, it said on Monday.
The unusual revision follows the government's decision to offer loans worth tens of billions of crowns in emergency funding to companies hurt by the coronavirus outbreak.
"In the current situation, there is considerable uncertainty about the actual borrowing requirement," Norges Bank said.
While Norway's fiscal budget spending is sourced from tax revenue and income from oil, as well as from the country's vast sovereign wealth fund, state lending programs for students, housing and companies are funded via government bonds.
As part of its response to the virus, parliament has approved the establishment of a 50 billion crown Government Bond Fund which will invest in bonds issued by companies.
"Bond issuance will depend on both the degree the Government Bond Fund is used and how the increased borrowing is divided between government bonds and Treasury bills," Norges Bank said.
In total, the central bank now aims to conduct 19 bond auctions in 2020, up from a previously planned 15. It may also add one or two syndicated bond issues on top of the one conducted earlier this year, it said.
The number of treasury bill auctions will meanwhile be raised to 23 from an originally planned 20.
