ida wolden bache : time to ease monetary policy is approaching introductory statement by ms ida wolden bache, governor of norges bank ( central bank of norway ), at the press conference following norway's announcement of the policy rate, oslo, 19 september 2024. * * * presentation accompanying the speech chart 1 : policy rate held unchanged the monetary policy and financial stability committee decided to keep the policy rate unchanged at 4. 5 %. based on the committee's current assessment of the outlook, the policy rate will most likely be kept at that level to the end of the year. norges bank is tasked with keeping inflation low and stable. the operational target is inflation of close to 2 percent over time. we are also mandated to help keep employment as high as possible and to promote economic stability. after inflation surged a couple of years ago, we have raised the policy rate significantly, and since december last year the policy rate has been held at 4. 5 percent. the interest rate has contributed to cooling down the economy and to dampening inflation. many central banks in trading partner countries have started cutting policy rates. one might wonder why we are not reducing the policy rate now. inflation has declined significantly from its peak but is still above our inflation target. the rapid decline in inflation observed in recent months is not expected to continue going forward. further disinflation will be restrained by the krone depreciation combined with the high growth in business costs. a restrictive monetary policy is still needed to bring inflation down to target within a reasonable time horizon. the committee is concerned with the possibility that if the policy rate is lowered prematurely, inflation could remain above target for too long. on the other hand, an overly tight monetary policy could contract the economy more than needed. when we set the policy rate, we have to balance these trade - offs. chart 2 : gradual policy rate reduction from next year based on our current assessment of the outlook, the policy rate needs to be kept at today's level for a period ahead. at the same time, we are approaching the time to lower interest rates. if the economy evolves as envisaged, we will maintain the policy rate at 4. 5 percent to the end of the year, before it is gradually reduced from the first quarter of next year. the policy rate forecast is little changed but implies a slightly faster rate reduction through next year than our previous forecast published in june. let me say a few more words about the background

svein gjedrem : wealth management in a public setting introductory statement by mr svein gjedrem, governor of norges bank ( central bank of norway ), to panel discussion on “ problems of plenty? challenges and opportunities from the accumulation of large exchange reserves and windfall revenue ”, arranged as part of the seminar program of the 2006 annual meetings of the imf and the world bank, singapore, 18 september 2006. please note that the text below may differ slightly from the actual presentation. * * * 1. thank you for this opportunity to discuss the challenges that arise when managing financial wealth in a public sector environment. norges bank now has eight to ten years of experience of this task, and i shall try to describe in brief the strategies adopted by norges bank, and what we believe we have learned. 2. we have a large amount of money under management. our foreign reserves are probably larger than needed for financial stability and monetary policy operations. but the most important fund is the government pension fund, formerly the petroleum fund. we have been responsible for managing that fund since its inception in 1996, and it has been a major task for us since 1998. 3. the value of the petroleum resources in the north sea is currently estimated at about usd 700 billion. the government receives the bulk of the revenues generated from petroleum extraction as sales revenues and taxes. the government channels these revenues into the pension fund as financial assets. annual spending from the fund is subject to a spending rule, whereby the government commits to limit spending. over time spending should not exceed the estimated expected real return on the fund ’ s investments, set at 4 per cent per year. this implies that the fund is expected to become a permanent savings account. 4. at the outset, there was already an investment management operation in the bank, for the foreign reserves. but when it became clear in 1997 that the pension fund would be growing fast, we decided to set up a separate management unit, now called norges bank investment management ( nbim ). our challenge was to build a business organisation within a traditional civil service culture. the new unit recruited investment professionals from outside the bank as well as people from the existing reserve management operations. nbim was explicitly defined as a business unit, which should be different from the rest of the central bank in many respects. to avoid any suspicion that nbim would benefit from proprietary central bank information, the new unit was placed completely outside the decision - making processes