(iii)  The economic transformation process experienced after the 2001 crisis has enabled significant achievements in macroeconomic stabilization and helped reduce the “dollarization” effect created by unstable macroeconomic policies and high inflation in the past. Despite some deviations from this main tendency due to exogenous shocks and changes in risk perceptions, decisive implementation of economic program has always enabled a return to the main tendency. This process, combined with favorable developments in the balance of payments, has supported the increase in foreign exchange supply in the economy. (iv)  In this framework, in order to minimize the impact on supply and demand conditions in the foreign exchange market, the Central Bank, which follows a moderate reserve-raising policy, has conducted its FX buying via auctions, whose terms and conditions are announced with due notice, since 1 April 2002. Moreover, the Bank has announced annual auction programs since 2005 and does not make any amendments to these programs, unless extraordinary differences are observed in foreign exchange liquidity. (v)  Meanwhile, as also emphasized in all its press releases, the Central Bank will continue to closely monitor the volatility in exchange rates and may directly intervene in the markets in the event of excessive volatility that might occur in either direction. These volatility interventions are not only carried out by considering past data with a mechanical rule, but by evaluating all aspects of realized and potential volatilities.
The Fund therefore purchased a large volume of equities from 2001 to 2003 and is buying a considerable volume now. Of the equities now owned by the Fund, 40 per cent were purchased last year when prices were moving down. 9  Knut Hamsun (1976): August. In Samlede Verker 11, Gyldendal Norsk Forlag, p. 120. (Unofficial translation by Norges Bank’s translators). BIS Review 16/2009  19  As a result, ownership in the business sector in the US, Europe and Asia has increased – in companies’ human capital, in their machinery and equipment, brands and organisation. In the long run, and even though many companies have now folded, it may perhaps be at least as safe as extending loans. Conclusion Let me conclude. At the moment, activity is falling in the Norwegian economy, as elsewhere. The source of the downturn is external. We cannot shield ourselves from its impact, but we can decide how we will address the turnaround. The global financial highway is now being modernised and overhauled. It is essential that traffic again flows smoothly. Rimbereid asks: “In which landscape Will we lay our next lucrative track?” 10 Norway has a credible and robust economic policy, and a business sector that is quick to adapt. This is a good point of departure. Thank you for your attention. 10  20  Øyvind Rimbereid, 2008: Herbarium, p.54. (Unofficial translation by Norges Bank’s translators). BIS Review 16/2009