Purchases of foreign currency for The Government Petroleum Fund
Norges Bank will resume foreign currency purchases for the Government Petroleum Fund. As decided by the Storting (Norwegian parliament), the surplus on the central government budget shall be allocated to the Government Petroleum Fund.
Government deposits in the Petroleum Fund are placed in a krone account in Norges Bank. The Bank is charged with the task of converting the krone amounts into foreign currency and investing the currency amounts abroad in accordance with the guidelines issued by the Ministry of Finance.
The surplus on the central government budget for 1997 is estimated at NOK 55.4 billion in the Final Budget Bill. In the period to 10 January 1997, Norges Bank purchased foreign exchange for about NOK 31 billion, which means that foreign currency in the amount of NOK 24.4 billion remains to be purchased for transfer to the Petroleum Fund. In addition, foreign currency corresponding to NOK 1.2 billion shall be bought and transferred to the Government Petroleum Insurance Fund.
Foreign currency equivalent to about NOK 3 billion will be purchased per month during the remainder of 1997, but Norges Bank will adjust the foreign currency purchases in response to changes in petroleum revenue flows.
The purchases must be seen against the background of Norges Bank's role as manager of the Petroleum Fund and, as such, the purchases are not undertaken as exchange market interventions.
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