I would like to emphasise, however, that calculations of this sort are uncertain. Chart 7 Probability distribution for NOK/EUR in one month  On the basis of the prices for various currency options, we can calculate the implied probability distribution for the krone exchange rate. In simple terms, one can say that the further to the left in the diagram the figure is, the higher a future appreciation of the krone is priced. A narrow, symmetric curve - or a bell - indicates that the uncertainty surrounding the future krone exchange rate is considered to be relatively slight, and that the risk of a depreciation or appreciation is priced  BIS Review 67/2000  8  symmetrically. The chart shows that the implied probability distribution for the krone has changed over time. Uncertainty surrounding the future krone exchange rate appears to have diminished. Chart 8 Probability distribution for USD/EUR in one month  The corresponding bell for the exchange rate between the euro and the US dollar indicates that there is considerable uncertainty surrounding the future exchange rate between the two currencies. Since autumn 1999 this uncertainty has mounted, while at the same time the euro is expected to fall against the US dollar. Chart 9 GDP mainland Norway Projections for 2000 from Inflation Reports December 1998 to June 2000  The assessment of the economic outlook has changed over the past 18 months.

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