The accounts must be assessed against the background of Norges Bank's responsibilities. One of the Bank's main responsibilities is the issue of banknotes and coins. This means that the Bank will always have non-interest-bearing debt. The offsetting entry is the Bank's interest-bearing claims on other market participants. The banknote monopoly thus results in central bank accounts which will normally show a profit (seigniorage) prior to adjustments for fluctuations in exchange rates and securities prices.

Norges Bank's income consists primarily of interest and any net exchange gains on the foreign exchange reserves. Exchange and capital gains are derived from exchange rate fluctuations, changes in equity prices and interest rate changes which affect bond prices. Norges Bank's result will depend on developments in these variables, and this can cause wide annual fluctuations in results.

The decline in prices in the international securities markets in 2002 resulted in a loss of NOK 2.1 billion, compared with a loss of NOK 3.8 billion in 2001. Due to the appreciation of the Norwegian krone, foreign exchange reserves translated into NOK showed exchange losses of NOK 24.4 billion in 2002, compared with exchange losses of NOK 4.9 billion in 2001. The exchange losses due to the appreciation of the krone have no effect on the international purchasing power of the foreign exchange reserves.

At the end of 2002, Norges Bank's international reserves amounted to NOK 170.5 billion at market value and taking into account repurchase agreements and deposits. This is NOK 1.9 billion more than at end-2001. International reserves comprise foreign exchange reserves, gold and claims on the International Monetary Fund (IMF).

From end-2001 to end-2002, foreign exchange reserves increased by NOK 2.4 billion to NOK 157.8 billion. Reserves increased mainly because foreign exchange transfers from the SDFI, the State's Direct Financial Interest in petroleum activities, and purchases of foreign exchange in the market to build up the Government Petroleum Fund were larger than the total amount transferred to the Petroleum Fund for 2002.

The total market value of international reserves, the investments of the Government Petroleum Fund and other foreign assets was NOK 787.9 billion at the end of 2002, compared with NOK 794.3 billion in 2001.

In 2002, the Storting decided to transfer NOK 8.9 billion to Norges Bank in order to strengthen the Bank's Adjustment Fund. This is equivalent to the amount transferred from Norge Bank's Transfer Fund to the central government for the 2001 accounting year. The Bank's deficit in 2002 will by and large be covered by the Adjustment Fund. As a result of the year's allocations, the Adjustment Fund amounts to NOK 21.5 billion. As there are no funds in the Transfer Fund, no transfer will be made to the Treasury.