Reference is made to the letter of 13 June 2003 from the Ministry of Finance, requesting Norges Bank to provide a further account of the conduct of monetary policy in 2002 (in relation to the account in Norges Bank's letter of 5 June 2003), and of the first eight months of 2003, including the relationship between actual inflation and the target for monetary policy. In its letter, the Ministry of Finance further requests that the account shall include a more detailed discussion of monetary policy in relation to inflation and exchange rate developments and the consideration of stability in output and employment.

Monetary policy in 2002 was discussed in Norges Bank's Annual Report for 2002, which was submitted to the Ministry of Finance on 1 April 2003. In an annex to this letter, an account is provided of the implementation of monetary policy in the first eight months of 2003. In addition, monetary policy is assessed in the light of economic developments in 2003 and the outlook ahead. The submission covers several of the issues that were discussed in NOU 2003: 13 "Competitiveness, wage formation and the exchange rate".

Yours sincerely

Svein Gjedrem