04.02.2009

1

Executive Board meeting4 February 2009

Difference between money market rates and expected key ratesPercentage points. 5-day moving average1 June 2007 – 2 February 2009

3 5

43 mth US3 mth Euro area 3

4 12 mth US12 mth Euro area

1,5

2

2,5

3

3,5 3 mth Euro area3 mth UK3 mth Norway

1,5

2

2,5

3

3,5 12 mth Euro area12 mth UK12 mth Norway

0

0,5

1

Jun-07 Dec-07 Jun-08 Dec-080

0,5

1

Jun-07 Dec-07 Jun-08 Dec-08

2

Sources: Bloomberg, Thomson Reuters and Norges Bank

04.02.2009

2

500500CitigroupBank of America

S

Price of credit default insurance Large international banks. 5-year CDS prices. Basis points 1 January 2007 – 2 February 2009

200

300

400

200

300

400 UBSHSBCDnB NORRoyal Bank of Scotland

0

100

0

100

Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08Source: Bloomberg

Equity markets Indices. 1 January 2007 – 2 February 2009

140

160

140

160

40

60

80

100

120

140

40

60

80

100

120

140

Euro areaJapan

0

20

40

0

20

40

Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09

NorwayEmerging economiesUS

4

Source: Thomson Reuters

04.02.2009

3

140

160

140

160Spot29.10.2008 350

400

350

400Industrial metalsTotal

Oil price (Brent Blend)USD per barrel. Daily figuresJanuary 2000 – October 2011

Commodity pricesIn USD. IndexWeek 1 2002 – week 5 2009

60

80

100

120

140

60

80

100

120

14017.12.200802.02.2009

150

200

250

300

350

150

200

250

300

350Food

0

20

40

0

20

40

2002 2004 2006 2008 2010

50

100

150

50

100

150

2002 2004 2006 2008

5

Sources: Thomson Reuters and Norges Bank

6

Source: New York Times 16.1.2009

04.02.2009

4

Manufacturing productionVolume. Seasonally adjusted. Quarterly change. Per cent 1970 Q1 – 2008 Q4

1010Japan UK Euro area US1) 1)

-5

0

5

-5

0

5

-15

-10

-15

-10

1970 1975 1980 1985 1990 1995 2000 2005

7

Source: Reuters EcoWin1) 2008 Q4 is calculated as an average of the numbers for October and November

Growth projections for 2009 Projected by the IMF at different points in time

5

6

7Projections OctoberProjections NovemberProjections January 09

0

1

2

3

4

5

-3

-2

-1

World Advanced Economies Emerging economies

8

Source: The IMF

04.02.2009

5

Fiscal measures for 2009

Fiscal stimulus in 2009 t f GDP1)as percentage of GDP1)

(Estimates in Report to the Stortingno. 37)

Euro area 0.9Germany 1.5UK 2.6Sweden 1.9Denmark 2.7

9

1) Change in structural budget balance as percentage of GDP

Source: Report to the Storting no. 37 (2008-2009).

General government fiscal balancesPercentage of GDP. 2000 – 2010

22

-4

-2

0

-4

-2

0

Advanced economies

-8

-6

-8

-6

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Advanced economies

World

Emerging and developing economies

10

Source: IMF Staff estimates

04.02.2009

6

Developments in 5-year government bond yields Spread between various countries and Germany. Percentage points. 1 June 2007 – 2 February 2009

3,5

4

3,5

4Spain

The Netherlands

1

1,5

2

2,5

3

1

1,5

2

2,5

3 Ireland

Greece

France

0

0,5

1

0

0,5

1

Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09

11

Source: Thomson Reuters

Actual and expected key ratesPer cent. 1 January 2003 – 2 February 2009

6

7

6

7US Euro area Norway UK Market after previous

monetary policy meeting (17 Dec 08)

2

3

4

5

2

3

4

5 2 February 2009

0

1

0

1

Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11

12

Sources: Thomson Reuters and Norges Bank

04.02.2009

7

4

585

88 I-44

3-month interest rate differentialand import-weighted exchange rate (I-44)1)

January 2002 – December 2011

0

1

2

3

488

91

94

97

100

I 44 (left-hand scale)

2 February 2009

2 February 2009

13

-2

-1

0100

103

1062002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Sources: Thomson Reuters og Norges Bank

Weighted interest rate differential(right-hand scale)

17 December 2008

1) A rising curve denotes an appreciation of the krone.

11

12

11

12

EURNOK sample space for NOK exchange rate aheadBased on 1-month currency option prices. Per cent 3 January 2008 – 2 February 2009

8,639

10

11

9

10

11

12 September 2008

7,65

7

8

7

8

Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10

14

Source: Thomson Reuters

04.02.2009

8

11

12

11

12

EURNOK sample space for NOK exchange rate aheadBased on 1-month currency option prices. Per cent 3 January 2008 – 2 February 2009

8,63

10,35

9

10

11

9

10

11

2 February 2009

12 September 2008

7,65 7,71

7

8

7

8

Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10

15

Source: Thomson Reuters

CPI and CPIXE1)

12-month change. Per cent. January 2006 – December 2008

5

6

5

6

CPI CPIXE

1

2

3

4

1

2

3

4

16

Sources: Statistics Norway and Norges Bank

-1

0

-1

0

2006 2007 2008 20091) CPI adjusted for tax changes and excluding temporary changes in energy prices.

04.02.2009

9

CPI-ATE1)

Total and by supplier sector2). 12-month change. Per centJanuary 2004 – December 2008

456

456

-2-10123

-2-10123

Domestically produced goods and services (0.7)

Imported consumer goods (0.3)

CPI-ATE

17

-5-4-3

-5-4-3

2004 2005 2006 2007 2008 2009

Sources: Statistics Norway and Norges Bank 1) CPI adjusted for tax changes and energy products.2) Norges Bank’s estimates.

Employment (LFS)In 1000s. Seasonally adjusted. January 2007 – November 2008

25502550

2400

2450

2500

2400

2450

2500

2350

2400

2350

2400

Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08

18

Source: Statistics Norway

04.02.2009

10

UnemploymentLFS unemployment, registered unemployed, and registered unemployed and on labour market programmesPer cent. Seasonally adjusted. February 1997 – November 2008

1010LFS unemployment

4

6

8

4

6

8Registered unemployed and on labour market programmesRegistered unemployed

0

2

0

2

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

19

Sources: Statistics Norway, Norwegian Labour and Welfare Administration (NAV) and Norges Bank

Index of commodity consumption Volume. January 2004 = 100. Seasonally adjustedJanuary 2004 – December 2008

130

140

130

140

100

110

120

100

110

120

80

90

80

90

Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09Sources: Statistics Norway and Norges Bank

04.02.2009

11

Industrial confidence indicator1)

Seasonally adjusted diffusion index. 1988 Q1 – 2008 Q4

2020

-10

0

10

-10

0

10

1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008-30

-20

-30

-20

21

Source: Statistics Norway1) Based on production expectations, stocks of finished goods and total stocks of orders

House prices and credit to households12-month change. Per cent. January 2001 – January 2009

20

25

20

25

14

16

14

16House prices Credit to households (C2)

0

5

10

15

20

0

5

10

15

20

4

6

8

10

12

14

4

6

8

10

12

14

22

-10

-5

-10

-5

2001 2003 2005 2007 20090

2

4

0

2

4

2001 2003 2005 2007Sources: Norwegian Association of Real Estate Agents, Assosiation of Real Estate

Agency Firms, FINN.no, ECON Pöyry and Norges Bank

04.02.2009

12

Market prices for commercial property and corporate debtAnnual rise in market prices and twelve-month change in debt. Per cent January 2001 – December 2008

6060 3030Market prices for commercial property1) Corporate debt

0

10

20

30

40

50

0

10

20

30

40

50

5

10

15

20

25

5

10

15

20

25

23

-30

-20

-10

-30

-20

-10

2001 2003 2005 2007-5

0

5

-5

0

5

2001 2003 2005 2007Sources: Statistics Norway, OPAK and Norges Bank

1) High-standard offices centrally located in Oslo.

Change in credit standards for loans to householdsPer cent

80100

80100

Factors affecting credit standards

60-40-200204060

60-40-20

0204060 Credit standards

Economic outlook Banks’ appetitefor risk Default

08 Q3

08 Q4

09 Q1

08 Q3

08 Q4

09 Q1

08 Q3

08 Q4

09 Q1

08 Q3

08 Q4

09 Q1

-100-80-60

-100-80-60

24

Source: Norges Bank

04.02.2009

13

80100

80100

Factors affecting credit standards

Change in credit standards for non-financialcorporationsPer cent

60-40-200204060

60-40-20

0204060

Economicoutlook

Banks’ appetitefor risk

Capital-

adequacy

FundingCredit standards

08 Q3

08 Q4

09 Q1

08 Q3

08 Q4

09 Q1

08 Q4

09 Q1

08 Q3

08 Q4

09 Q1

08 Q3

08 Q4

09 Q1

-100-80-60

-100-80-60

25

Source: Norges Bank

The Government’s stimulus package

• NOK 20 bn stimulus package• Increased expenditure (NOK 16 75 bn)• Increased expenditure (NOK 16.75 bn)

• local government• transport and communications projects• other building projects

• Tax cuts for the business sector (NOK 3.25 bn)

• Expansion of lending guarantee and investment schemes• Expansion of lending, guarantee and investment schemes(NOK 8 bn)

26

04.02.2009

14

Expected real return on the Government Pension Fund – Global and structural non-oil deficitIn billions of 2009-NOK. 2001 – 2009

120

140

120

140Structural deficit, stimulus package 2009

40

60

80

100

120

40

60

80

100

120 Structural non-oil deficit

4 pct. real return

0

20

0

0

20

0

2001 2002 2003 2004 2005 2006 2007 2008 2009

27

Sources: National Budget for 2009 and Report to the Storting no. 37 (2008-2009).

Costs of money market funding and long-term fundingPer cent. Weekly figures. 3 January 2007 – 29 January 2009

1212Premium on long-term funding (5-year bank bond)

1)

4

6

8

10

4

6

8

10 Difference between 3-month money market rate and key policy rate

Key policy rate

1)

0

2

0

2

Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08

28

1) Effective 3-month NIBOR Sources: DnB NOR Markets and Norges Bank

04.02.2009

15

Key policy rate, money market rate1) and banks’ weighted lending rate on new loans2)

Per cent. 1 June 2007 – 2 February 2009

8

9

8

9Money market rateM t t

3

4

5

6

7

8

3

4

5

6

7

8 Mortgage rateKey policy rate

0

1

2

0

1

2

Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08

29

1) 3-month NIBOR.2) Interest rates on new mortgage loans of NOK 1m within 60% of purchase price with variable interest rate. Figures for the 20 largest banks, weighted according to market share.

Sources: Norsk familieøkonomi ASand Norges Bank

8

9

8

9

Key policy rateActual developments, projection and strategy interval. Per cent

3

4

5

6

7

3

4

5

6

7

1/053/042/05 3/05

1/062/06

3/06

2/071/07

3/07 1/08 2/08

3/08Strategy interval: 2 – 3 per cent

0

1

2

0

1

2

2005 2006 2007 2008 2009 2010 2011

30

3/0

Source: Norges Bank

Projection17 December 2008