Pål Longva: Report from Norges Bank Watch

Remarks by Mr Pål Longva, Deputy Governor of Norges Bank (Central Bank of Norway), on the Centre for Monetary Economics' (CME) assessment of the Norges Bank's conduct of monetary policy, published in its Norges Bank Watch Report Series, Oslo, 23 February 2024.

The views expressed in this speech are those of the speaker and not the view of the BIS.

In February/March each year, the Centre for Monetary Economics (CME) presents a report commissioned by the Ministry of Finance on Norges Bank's activities. A committee of independent economists assesses Norges Bank's conduct of monetary policy. The reports are published by the CME in its Norges Bank Watch Report Series.

First, I would like to thank this year's committee for an excellent and thorough report. An annual assessment of this kind is very useful. I would also like to thank the Centre for Monetary Economics for hosting the event and for the opportunity to comment on the report.

I would like to comment on four major topics raised by the committee: the conduct of monetary policy in 2023, modelling the krone exchange rate, taking account of international impulses and communicating uncertainty.

Let me begin with the conduct of monetary policy last year.

The year 2023 was marked by continued high inflation both in Norway and among its trading partners. At the beginning of that year, we expected a policy rate of around 3 percent in 2023. That didn't happen. We revised our economic growth and inflation forecasts, and the policy rate was raised higher and faster than we had anticipated.