ida wolden bache : the policy rate is kept unchanged 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, 25 january 2024. * * * charts accompanying the speech chart : policy rate kept unchanged at 4. 5 percent the monetary policy and financial stability committee decided to keep the policy rate unchanged at 4. 5 percent. 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. inflation is still high. in order to return inflation to target, we have raised the policy rate substantially over the past couple of years. in december, the policy rate was raised to 4. 5 percent, and we signalled that it would remain at that level for some time ahead. new forecasts have not been prepared for this meeting, but we have assessed new information against the december forecasts. our assessment is that the outlook has not changed materially since then. chart : international inflation has declined other central banks have also raised policy rates significantly in recent years in order to bring down inflation. inflation among trading partner countries declined through last year, partly reflecting lower energy prices but also a slower rise in prices for other goods and services. the market's interpretation of the outlook indicates that a number of central banks will lower their policy rates in the course of spring. chart : the krone has appreciated the krone depreciated considerably through autumn last year. since the december monetary policy meeting, the krone has appreciated again and more than expected. the appreciation has coincided with a rise in domestic market interest rates at the same time as international rates have fallen. the krone exchange rate is not a policy target, but we are concerned with the krone exchange rate insofar as it affects the inflation outlook. a stronger krone contributes to reducing import price inflation. chart : low growth in the norwegian economy economic growth in norway is low. household consumption appears to have held up better towards the end of last year than we projected in december. on the other hand, the level of new homes sales is low, as is the level of construction activity. in contrast to the construction industry, the oil services industry is experiencing vigorous growth. 1 / 2 bis - central bankers'speeches the employment rate is high, and

other norwegian export goods. monetary policy has also influenced the path for norway ’ s relative costs, but the nominal value of the krone is about the same as 10 years ago. strong growth in public expenditure and expectations of moderately higher growth in the use of petroleum revenues now seem to have been factored into the cost level. over the past 30 years manufacturing has been scaled back in waves. the last wave occurred around the turn of the millennium, but a substantial decline also occurred in the period 1977 to 1984 and from 1987 to 1992. prior to these periods, the manufacturing sector ’ s competitiveness deteriorated. the usefulness of a fiscal rule is that it gives weight to long - term considerations when addressing day - to - day economic policy challenges. the fiscal rule stabilises enterprises ’ expectations concerning competitiveness and the krone exchange rate. this can prevent abrupt and pronounced swings in the structure of the economy. if the government authorities disregard the rule, enterprises will lose an important reference. a policy rule can make matters worse if economic agents have drawn up long - term plans on a faulty basis. 3 both short - term and long - term considerations imply that the use of petroleum revenues as a share of the petroleum fund should be curbed ahead. the norwegian economy is growing at a brisk pace. the public sector has invested heavily in the care of the elderly, which should cover the needs of a generation that was born just after world war i. the need for growth in public expenditure will be more moderate in the coming years and marked by the small cohorts of the 1930s and war years, who are now joining the ranks of the elderly. moreover, the national insurance scheme, introduced in 1967, is nearing maturity. in addition, a few years remain before the large post - war cohorts retire and add to the demand for health services. hence, the conditions are now conducive to returning to the use of 4 per cent of the petroleum fund. the current cost level in the norwegian business sector is adapted to an expansion of the petroleum sector and a steady phasing - in of petroleum revenues into the mainland economy. costs rose sharply from the mid - 1960s to the mid - 1970s and reached a very high level. in subsequent years, costs have varied around this level. after a period, we will be able to cover a smaller share of our imports using current petroleum revenues and drawings on the petroleum fund. competitiveness must then have to be improved. it may have to be