svein gjedrem : monetary policy in norway lecture by svein gjedrem, governor of norges bank ( central bank of norway ), at the norwegian school of economics and business administration, bergen, 17 october 2002. the text below may differ slightly from the actual presentation. the references for the speech can be found on the norges bank ’ s website. * * * a year and a half ago, the government and the storting adopted new guidelines for economic policy in norway. the guidelines outline a medium - term strategy for the use of petroleum revenues over the government budget. government petroleum revenues are transferred to the government petroleum fund. the guidelines provide for the use of the expected real return on the fund, i. e. 4 per cent of the fund ’ s market value each year. as the fund ’ s market value grows, so does its return. a gradual increase in the use of petroleum revenues ensures greater stability than a rapid withdrawal. the government laid down a new operational mandate for monetary policy at the same time. norges bank shall set the key interest rate with a view to maintaining low and stable inflation. the inflation target is set at 2½ per cent. the responsibility for implementing monetary policy is delegated to norges bank pursuant to the norges bank act and appurtenant regulation. norges bank sets the interest rate on the basis of our understanding of the regulation. our interpretation places emphasis on the government ’ s rationale behind the regulation, on the objective as formulated in the first paragraph and on our knowledge about the relationships between the interest rate, the krone exchange rate, output, employment and inflation. the first sentence in the monetary policy mandate refers to the value of the krone. stability in the internal value of the krone implies that inflation must be low and stable. the regulation also states that monetary policy shall be aimed at stability in the external value of the krone. the krone exchange rate fluctuates from day to day, from week to week, and from month to month. we have free international trade and free capital movements. we do not have the instruments for fine - tuning the exchange rate. but when monetary policy is oriented towards low and stable inflation, this will contribute to a stable krone exchange rate over time. the first paragraph of the mandate sets forth its intentions. the last paragraph specifies what norges bank is required to do. the inflation target is set at 2½ per cent. if we

øystein olsen : the conduct of monetary policy introductory statement by mr øystein olsen, governor of norges bank ( central bank of norway ), at the hearing before the standing committee on finance and economic affairs of the storting ( norwegian parliament ), oslo, 19 may 2016. * * * please note that the text below may differ from the actual presentation. thank you for the opportunity to report on the conduct of monetary policy. my introduction here today is based on norges bank ’ s annual report for 2015 and our monetary policy assessments up to the monetary policy meeting last week. chart : inflation monetary policy in norway has since 2001 been oriented towards keeping inflation low and stable. the operational target is consumer price inflation of close to 2. 5 percent over time. over the past 15 years, inflation has averaged around 2 percent. this is close to the target. norges bank operates a flexible inflation targeting regime, giving weight in our interest rate setting to developments in output and employment as well as inflation. the effects of monetary policy are uncertain. this normally suggests proceeding with caution. as monetary policy also seeks to be robust and take account of the risk of particularly adverse outcomes for the economy, the tasks of monetary policy should include contributing towards mitigating the risk of a build - up of financial imbalances. over the past year, monetary policy in norway has to a great extent been influenced by weaker economic growth, resulting from the fall in oil prices and lower activity in the petroleum industry. to counteract the decline, the key policy rate has been reduced by a total of 1 percentage point since december 2014. the key policy rate is now 0. 5 percent. a small open economy such as norway is also influenced by the world around us. norway ’ s low interest rate level is largely a consequence of low interest rates abroad. chart : global growth projections growth in the global economy has been low in recent years, partly reflecting long - term trends such as lower productivity growth and demographic changes. long - term interest rates abroad have shown a falling trend since the 1980s. over the past few years, the repercussions of the financial crisis and the need for deleveraging in many countries have weighed on growth. while the moderate recovery in advanced economies continued last year, growth in china and other emerging economies slowed. in its april world economic outlook report, the international monetary fund ( imf ) revised down its global growth forecasts yet again. at the same time, the imf