Foreign exchange reserves
The foreign exchange reserves and claims on the International Monetary Fund (IMF) together constitute Norges Bank's international reserves.
Foreign exchange reserves are to be used for transactions in the foreign exchange market in support of monetary policy or financial stability. In addition, foreign exchange reserves are used to meet Norway's international obligations.
The foreign exchange reserves are divided into a money market portfolio and a long-term portfolio. In addition, a buffer portfolio has been established for foreign exchange purchased to build up the Government Pension Fund Global.
The foreign exchange reserves shall be invested so that at least SDR 10bn, including the entire money market portfolio, can be used within a single trading day without having to realise any appreciable losses. The money market portfolio shall be between SDR 3.5bn and SDR 4.5bn and be invested in short-term fixed income instruments. The benchmark index for the money market portfolio is a composite of USD and EUR overnight money market indices and Treasury bill indices for the same currencies. The long-term portfolio shall be invested in equities and fixed income securities. The benchmark index for the long-term portfolio is a composite of global equity and bond indices. The equity allocation in the strategic benchmark index is 40 percent.
The purpose of the petroleum buffer portfolio is to ensure that the Government Pension Fund Global (GPFG) is provided with an adequate supply of fresh capital. Funds accumulate in the portfolio through transfers of foreign currencies from the State's Direct Financial Interest in petroleum activities (SDFI) and through foreign exchange purchases Norges Bank undertakes in the markets on the basis of the Ministry of Finance's monthly allocations to the GPFG. Funds are normally transferred each month. No benchmark index has been set for the petroleum buffer portfolio.
As from 2013 Q2, a comprehensive report on the management of the Bank's foreign exchange reserves is published.
Claims on the IMF
Claims on the IMF consist of three components: SDR accounts (Special Drawing Rights), reserve positions in the IMF and loans to the IMF (Poverty Reduction and Growth Facility). The Executive Board of Norges Bank has delegated the responsibility of establishing guidelines for management of the SDR to the Governor.