increased by slightly more than 12 per cent. over the same period, demand for oil in oecd countries fell by nearly 5 per cent. commodity - intensive industrialisation and strong per capita income growth in emerging economies are likely to reinforce the upward shift in aggregate commodity demand. the norwegian macroeconomic framework the changing structure of the global economy helps to explain the economic shift experienced in norway during the 2000s. prices for norwegian exports, such as oil, gas, metals, minerals and fish, rose markedly, while prices for imported goods fell. in the seven years leading up to the financial crisis, the volume of mainland gdp expanded at an average annual rate of 3. 4 per cent. exactly ten years ago today, norges bank was charged with the task of setting the interest rate with a view to keeping inflation low and stable. at the same time, new fiscal policy guidelines, also known as the fiscal rule, were implemented, charting a course for petroleum revenue spending. norway ’ s sovereign wealth fund, which is now called the government pension fund global, was designed to prevent fluctuations in oil prices from feeding through to the mainland economy. bis central bankers ’ speeches a decade of inflation targeting the inflation target for monetary policy provides a sound anchor for inflation expectations. over the past decade, cpi inflation has varied to some extent. underlying inflation has naturally been more stable, but has been both higher and lower than the target. if we look at the ten - year period as a whole, inflation has been 2 per cent, that is to say close to the target. bis central bankers ’ speeches still, over the past ten years, the conduct of monetary policy has been tested. during this period, we have gained insight into the functioning of the norwegian economy under an inflation - targeting regime. let me touch upon some of these insights. at the beginning of the decade, we learned that it can be demanding to strike a balance between different monetary policy considerations in a small, open economy. when the key policy rate is raised to restrain a pronounced rise in domestic cost inflation, it can have a strong impact on the krone exchange rate, as observed in 2002 – 2003. this influences both the real economy and the inflation outlook. midway through the decade, inflation rapidly declined. china ’ s entry into world trade and increased imports to norway from asia led to a persistent fall in prices for many goods. the combination of low inflation and strong economic growth posed a challenge to the conduct of monetary policy. interest rates – both at

zealand's assessment that interventions would hardly have made a significant contribution to increasing stability in new zealand's economy in recent years. internationally, a number of empirical studies have been conducted on the effectiveness of exchange market interventions. the studies of interventions in the 1990s find that they were more effective than studies conducted in the 1980s. this may be due to shifts in monetary policy regimes and greater emphasis on transparency. it is probably easier to win credibility when market participants know that interventions are anchored in stabilisation policy considerations rather than a short - term exchange rate objective. however, this presupposes market confidence in the ability of economic policy in general and monetary policy in particular to deliver nominal stability. it is first and foremost the signal effects of interventions that have been found to be effective and particularly when interventions are made publicly known and justified by the central bank. lars e. o. svensson. ” independent review of the operation of monetary policy : report to the minister of finance ”, february 2001. l. sarno and m. p. taylor. ” official intervention in the foreign exchange market : is it effective, and if so, how does it work ”, discussion paper no. 2690, february 2001, center for economic policy research. for norges bank, it may be appropriate in special situations to intervene to a limited extent to stabilise inflation, should the krone move to a level that we do not consider reasonable on the basis of fundamentals, and if this could contribute to stabilising inflation. however, norges bank will not act in a way that prompts unilateral bets against the krone. as a main rule, the bank is likely to consider intervening only when we see a clear profit opportunity for the central bank. this may also be appropriate in the event of extensive short - term fluctuations in thin markets. in such situations, the risk of a loss - making game against foreign exchange operators will be limited. any interventions and the background for them will be clearly communicated to market participants. evaluation and predictability today's inflation rate is partly the result of the interest rate that was set one to two years ago. current inflation figures do not provide an adequate basis for determining the level at which interest rates should be set today. monthly figures for the consumer price index are also influenced by random and temporary factors that have little impact on inflation over time. precipitation levels influence electricity prices. changes in indirect taxes have an immediate impact on the consumer price index. the