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Executive Board meeting 28 May 2008

Executive Board meeting 28 May 2008. 1. Strategy interval. 1/08. 3/07. 2/07. 1/07. MPR 1/08. 3/06. 2/06. 1/06. 3/05. 2/05. 1/05. 3/04. Key policy rate. 2. Source: Norges Bank. Key policy rate in the baseline scenario and estimated forward rates Per cent. Market 26 May 2008.

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Executive Board meeting 28 May 2008

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  1. Executive Board meeting28 May 2008 1

  2. Strategy interval 1/08 3/07 2/07 1/07 MPR 1/08 3/06 2/06 1/06 3/05 2/05 1/05 3/04 Key policy rate 2 Source: Norges Bank

  3. Key policy rate in the baseline scenario and estimated forward ratesPer cent Market 26 May 2008 Baseline scenario MPR 1/08 Market after publication of MPR 1/08 (13 March) Source: Thomson Reuters and Norges Bank

  4. 3-month interest rate differential and import-weighted exchange rate (I-44)1)January 2002 – December 2011 MPR 1/08 I-44 (left-hand scale) 26 May 2008 26 May 2008 Weighted interest rate differential (right-hand scale) 1) A rising curve denotes an appreciation of the krone Source: Thomson Reuters and Norges Bank

  5. 26 May 2008 Market after publication of MPR 1/08 (13 March) Key policy rates and forward ratesPer cent US UK Norway Euro-area Sweden Source: Thomson Reuters and Norges Bank

  6. Difference between three-month money market rates and expected key policy rates1) Historical and ahead. Percentage points. At 26 May 2008 UK US Norway2) Euro-area Source: Bloomberg, Thomson Reuters and Norges Bank 1) The expected key rate is measured by the Overnight Indexed Swap (OIS). 2) Norges Bank’s estimates

  7. CDS prices for US and European companies and selected banks. Basis points. 1 January 2007 - 26 May 2008 Merrill Lynch Citigroup Goldman Sachs Europe1 US1 UBS 1) CDS prices for investment grade companies Source: Bloomberg

  8. CDS prices for Iceland and Icelandic banks Basis points. Daily figures. 1 January 2007 - 26 May 2008 Glitnir Landsbanki Kaupthing Iceland (Govern.) Source: Thomson Reuters and Bloomberg

  9. Yield differential between corporate and government bonds (US and Euro-area) and between emerging economies and the US (government bonds) 10-year maturity. Percentage points Emerging economies US BBB Euro area BBB Source: Thomson Reuters

  10. Survey of bank lending practices. US and the euro area.Share of banks that will tighten their credit standards for different customer groups. Per cent. Quarterly figures. 03 Q1 – 08 Q2 Enterprises, euro area Mortgages1), US Mortgages, euro area Large and medium-sized enterprises, US 1) Up to and including 07 Q1 mortgage figures cover all household mortgages. Thereafter, they only include prime mortgages. Source: Thomson Reuters

  11. Norges Bank’s lending survey Banks are tightening lending practices Commercial properties. Net figures. Per cent Enterprises. Net figures. Per cent Norway UK Norway UK 1) Net figures are weighted survey answers. Blue columns represent the current quarter, red dots represent the expected situation next quarter. Red dots are moved one quarter ahead. Sources: Bank of England and Norges Bank

  12. EquitiesIndices.1 January 2007 = 100 Emerging markets, MSCI Norway, OSEBX Japan, Topix US, S&P 500 Europe Stoxx Source: Thomson Reuters

  13. Commodity prices, food In USD. Indices. 3 January 2006 = 100. 3 January 2006 – 23 May 2008 Corn Wheat Soy beans Coffee 1)US figures only up to 23 May due to closed stock markets in the US. Source: Thomson Reuters

  14. Rise in consumer prices abroad12-month change. Per cent. January 2002 – April 2008 Russia US Sweden Brasil UK India Euro area Japan China

  15. Key policy rate, money market rate1) and banks’ lending rate on new loans2) In per cent. 3 May 2007 – 23 May 2008 Mortgage rate Money market rate Key rate 1) 3-month NIBOR 2)Interest rates on new mortgage loans of NOK 1 million within 60% of purchase price with floating interest rate. Figures for the 20 largest banks, weighted according to market share. Sources: Norsk familieøkonomi AS and Norges Bank

  16. Price indices1) for Norwegian exports in NOK2001=100. Q1 2001 – Q1 2008 Oil price (Brent Blend) in USD per barrelFutures prices (broken lines) 26 May 08 23 Apr 08 10 Mar 08 (MPR 1/08) 1) Norges Bank’s computations based on world market prices Sources: Reuters (EcoWin), Statistics Norway and Norges Bank

  17. Freight rates. Indices based on rates in USD. Tank: World Scale West from the Middle East. Dry bulk: Baltic Dry4 January 2000 – 26 May 2008 Dry bulk, left-hand scale Tank, right-hand scale Source: Thomson Reuters

  18. Mainland GDPQuarterly growth. Seasonally adjusted. Per cent Sources: Statistics Norway and Norges Bank

  19. Housing and non-residential building starts. Average of last three-month-period relative to previous three-month period. Seasonally adjusted. Per cent Source: Statistics Norway

  20. UnemployedPercentage of labour force. Seasonally adjusted. February 1997 - April 2008 LFS unemployment Registered unemployed and on labour market programmes Registered unemployed Sources: Statistics Norway, Norwegian Labour and Welfare Organisation (NAV)

  21. Employment (LFS)1000 persons. Seasonally adjusted. December 2006 – august 2008 Source: Statistics Norway

  22. Underlying spending growth in the government budget and nominal growth in mainland GDPPer cent. 1985 – 2008 Growth in mainland GDP Underlying spending growth Sources: Ministry of Finance and Statistics Norway

  23. Real exchange rateDeviation from mean1). 1970 - 2008. Per cent Mean January-May 2008 Relative wage costs Relative consumer prices Average ”oil age” Sources: Statistics Norway, Technical Reporting Committee on Income Settlements, Ministry of Finance and Norges Bank 1) Data for 2008 based on observations to 26 May

  24. Inflation indicators.12-month change. Per cent. January 2002 – April 2008 CPI Weighted median CPI-ATE 20 per cent trimmed mean Source: Statistics Norway

  25. CPI, CPI-ATE and CPI-ATE plus ”energy trend”1) 12-month change. Per cent. Monthly figures. January 2002 – April 2008 CPI CPI-ATE + ”energy trend” CPI-ATE Sources: Statistics Norway and Norges Bank 1) HP- filtered (lamda=14400) energy price trend based on projected energy prices in MPR 1/08

  26. Prices for domestically produced goods and services1)Development since January 1997 and January 200712-month change. Per cent 2007 1997 Jan 97/07 Jul 97/07 Jan 98/08 Jul 98/08 1) Adjusted for tax changes and excluding energy products Sources: Statistics Norway and Norges Bank

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