Norges Bank 11 Executive Board meeting 15 October 2008

Norges Bank 2 Source: Bloomberg JPMorgan Chase iTraxx Europe index Goldman Sachs Morgan Stanley Price of credit default insurance Large international banks. 5-year CDS prices. Basis points. 2 July 2007 – 13 October 2008 Bank of America DnB NOR UBS

Norges Bank 3 Sources: DnB NOR Markets, Bloomberg and Thomson Reuters UK Germany Effective yields on covered bonds 5-7 years average term to maturity. Percentage points 5 January 2004 – 10 October 2008 Spain Denmark Ireland Norway 1) 1) The regulation relating to covered bonds entered into force on

Norges Bank 4 Difference between money market rates and expected key rates 1) Percentage points. 5-day moving average. 2 July 2007 – 13 October 2008 Sources: Bloomberg, Thomson Reuters and Norges Bank 1) The expected key rate is measured by the Overnight Index Swap (OIS). For Norway, the estimates are based on key policy rate expectations in the market.

Norges Bank 5 Equities Total return. 1 July 2007 = July 2007 – 13 October 2008 Source: Thomson Reuters US, S&P 500 Emerging markets, MSCI Norway, OSEBX Europe, Stoxx Japan, Topix

Norges Bank 6 Implied volatility from equity options Per cent. 1 January 2005 – 13 October 2008 Sorces: Thomson Reuters and Oslo Børs Europe Norway US

Norges Bank 7 Global Risk Index Expected volatility between USD, EUR and JPY in per cent 1) 1 January 2005 – 13 October 2008 Source: Bloomberg 1) GRI is based on implied volatility derived from prices on 3-month currency options between EUR, USD and JPY (equally weighted).

Norges Bank 8 Total risk index 1) Daily observations. 1 January October 2008 Sources: Thomson Reuters and Norges Bank 1) Compound indicator based on arithmetic mean of seven financial market components

Norges Bank 9 Sources: Thomson Reuters and Norges Bank I-44 (right-hand scale) Weighted interest rate differential (left-hand scale) 25 June October ) A rising curve denotes an appreciation of the krone. 3-month interest rate differential and import-weighted exchange rate (I-44) 1) January 2002 – December October 2008

Norges Bank 10 Implied volatility in the Norwegian exchange market Based on 1-month currency option prices. 1 January 2005 – 13 October 2008 Source: Bloomberg

Norges Bank 11 1) I XDR (MPR 2/08) Oil price (Brent Blend) in USD per barrel Futures prices (broken lines) International commodity prices 1) Index. Week = 100 Week – week Sources: Thomson Reuters, Statistics Norway and Norges Bank

Norges Bank 12 Net exports from G-7 to emerging economies Contribution to GDP growth in the G-7 countries. Percentage units Q1 – 2008 Q2 Source: OECD

Norges Bank 13 Growth forecasts WEO 1) GDP. Percentage change on previous year Sources: IMF and Norges Bank 1) World Economic Outlook

Norges Bank Q4 Source: IMF 1) IMF forecasts from July and October Growth forecasts WEO 1) GDP. Percentage change on previous year 2009 Q4 1)

Norges Bank 15 US Source: Thomson Reuters Rise in consumer prices abroad 12-month change. Per cent. January 2002 – September 2008 Russia Brazil India 1) China UK Euro area Japan Sweden 1) Wholesale prices

Norges Bank 16 Sources: Thomson Reuters og Norges Bank US Euro area 13 October 2008 Market after MPR 2/08 (25 June) Sweden UK Key rates and forward rates Per cent. 1 June 2007 – 13 October 2008

Norges Bank 17 CPI CPIXE 1) Consumer prices 12-month change. Per cent. January 2002 – September ) CPIXE: CPI adjusted for tax changes and excluding temporary changes in energy prices Sources: Statistics Norway and Norges Bank

Norges Bank 18 National Budget 2009 A structural, non-oil deficit of NOK 92 billion in 2009 equals the expected real return on the Fund. The Government Pension Fund – Global estimated at NOK 2300 billion at the start of 2009 The deficit increases by 14 billion 2009-NOK from 2008 to 2009, or 0.7 percentage point of trend GDP Nominal underlying growth in spending in the national budget of 7.8 per cent in Nominal growth in mainland GDP estimated at 5.7 per cent

Norges Bank 19 Source: Thomson Reuters Trend Manufacturing production index Seasonally adjusted volume index. 3-month moving average. January 2002 – August month moving average Capital goods Intermediate goods Consumer goods

Norges Bank 20 Actual and expected production Manufacturing, building and construction Production for home market Market outlook Exports Suppliers to petroleum industry Building and construction Increasing Source: Norges Bank and Norges Bank Regional Network

Norges Bank 21 Extra round of phone calls Norges Bank’s regional network Private consumption –Decline in travel and restaurant sectors in recent weeks Investment –Sharp decline in building starts second half of 2008 –Pronounced slowdown in commercial real estate in recent months –Weaker investment prospects in retail trade and services Employment –Decline in employment in building and construction in past couple of months and prospects for further decline –Decline in employment in some service industries supplying the household sector –Increased supply of labour

Norges Bank 22 Index of commodity consumption Volume. Seasonally adjusted. January 2005 – April 2009 Source: Statistics Norway

Norges Bank 23 Household net lending Total past four quarters. In billions of NOK Q1 – 2008 Q2 Financial sector accounts (FINSE) National accounts National accounts, excluding reinvested dividends Sources: Statistics Norway and Norges Bank

Norges Bank 24 Unemployed Percentage of labour force. Seasonally adjusted. January 1998 – August 2008 Registered unemployed and on labour market programmes LFS unemployment Registered unemployed Sources: Statistics Norway, Norwegian Labour and Welfare Administration (NAV) and Norges Bank

Norges Bank 25 Source: Statistics Norway Employment (LFS) In 1000s of persons. Seasonally adjusted. June 2006 – July 2008

Norges Bank 26 Credit to enterprises 1) Property prices and credit Growth from same month/half-year previous year. Per cent. Credit to households 1) Non-financial enterprises mainland Norway. House prices Sources: Norwegian Association of Real Estate Agents, Association of Real Estate Agency Firms, Finn.no, ECON Pöyry, Statistics Norway and Norges Bank

Norges Bank 27 Key policy rate, money market rate 1) and banks’ lending rate on new loans 2) Per cent. 1 July 2007 – 14 October 2008 Money market rate Mortgage rate Key policy 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

Norges Bank 28 Key policy rate in the baseline scenario and estimated forward rates Per cent Q4 – 2010 Q4 Sources: Thomson Reuters and Norges Bank Market after publication of MPR 2/08 (25 June) Baseline scenario MPR 2/08 Market 13 October 2008

Norges Bank 29 Key policy rate Source: Norges Bank 1/05 3/04 2/05 3/05 1/06 2/06 3/06 2/07 1/07 3/07 1/08 2/08 Strategy interval MPR 2/08