Strate gy Document 3/03 Implementation of monetary policy in the period to 10 March 2004.

The projections in the Inflation Report are based on the technical assumption that the krone exchange rate will remain stable.. Exchange rates between the major currencies

In recognition of this fact, Norges Bank gradually gave greater weight to influencing inflation developments as a prerequisite for a more stable krone exchange rate over time..

Monetary policy aimed at a stable krone exchange rate, resulting in high real interest rates.. But with a binding commitment to a fixed exchange rate, inflation was brought

If growth in the Norwegian economy is higher than external growth and there are prospects of high domestic inflation, the interest rate will be increased, and the value of the

3 Based on assumptions concerning forward rates and a gradually declining krone exchange rate, and an assumption that monetary policy easing will not translate into stronger wage

Forward rates have risen in the period from March to June and the krone has appreciated compared with the path projected for the forward exchange rate in

Average of US, euro area, UK and Sweden.. 2) Implied five-year forward rates five years ahead based on five- and ten-year interest rate swaps for Norway less the inflation target.

In the press release on the monetary policy meeting of 18 September, the Bank stated: “It is Norges Bank’s assessment that, with an unchanged interest rate, the probability