Inflation-targeting central banks usually publish inflation reports or monetary policy reports, but there are major differences in the frequency of publication, horizons and assumptions for projections as well as the contents in general.6 In the UK, economic developments receive broad coverage. The Bank makes projections two years ahead, but only for developments in GDP and prices. Sweden has a two-year horizon for the inflation target. The inflation report does not discuss the monetary policy stance. Instead, this is presented in the published minutes from the monetary policy meetings. The inflation report contains relatively detailed prognoses. In all inflation-targeting countries, with the exception of Iceland, the interest rate is assessed at pre-announced times. The interest rate may also be assessed at extraordinary meetings. In addition, signals about the interest rate may be given in speeches or other statements. Practice varies with regard to the publication of meeting minutes and voting. At Norges Bank, we have become more transparent in recent years about the background for the interest rate decisions. So far, we have only had positive experience with this. In statements following monetary policy meetings, press conferences, inflation reports and speeches, we present an account of aspects of economic developments that influence the Executive Board’s assessments and interest rate decisions. Everything is available on Norges Bank’s website. Interest rate decisions are based on a monetary policy strategy drawn up by the Executive Board every four months. The strategy is published as soon as it is adopted and prior to the relevant strategy period.

Prices for imported goods and services will increase. A weaker currency strengthens the competitive strength of a country’s enterprises and indirectly increases output, employment and inflation. Most inflation-targeting countries base their monetary policy on inflation targeting that is more flexible and use some time to bring inflation back to target, i.e. flexible inflation targeting. Such a policy has a less pronounced effect on demand and output than stricter inflation targeting. We see that real economic developments among the first inflation-targeting countries have become more stable. Growth has also accelerated. For all OECD countries in the first group of inflation-targeting countries, growth has been higher since inflation targeting was introduced than before. With confidence in the inflation target, monetary policy can make a greater contribution to smoothing fluctuations in the economy. Inflation expectations have also fallen and are stable at the target.7 On the whole, we may conclude that the inflation-targeting countries have had low and stable inflation. Growth has increased and become more stable. Nevertheless, we cannot necessarily conclude that inflation targeting alone has been responsible for these favourable results. Other countries have also had favourable economic developments in the last ten to fifteen years. The results must be seen in the light of the fact that all of these countries have conducted a sound monetary policy. Low and stable inflation is an important and often the only monetary policy objective.