The accounts must be assessed against the background of Norges Bank's tasks. One of the Bank's main tasks is the issue of bank notes 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.

The main items in Norges Bank's profit and loss account are interest and any net exchange gains or losses on foreign exchange reserves. Exchange and capital gains are derived from exchange rate fluctuations, changes in equity prices and interest rate changes that affect bond prices. Norges Bank's results will depend on developments in these variables, which may cause wide annual fluctuations in the Bank's results.

The rise in prices in international securities markets in 2004 resulted in a gain of NOK 5.7 billion, compared with a gain of NOK 4.2 billion in 2003. Due to the appreciation of the Norwegian krone, foreign exchange reserves translated into NOK show exchange losses of NOK 10.0 billion in 2004, compared with exchange gains of NOK 12.3 billion in 2003. 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 2004, Norges Bank's international reserves amounted to NOK 219.4 billion at market value and taking into account repurchase agreements and deposits. This is NOK 17.4 billion more than at end-2003. International reserves comprise foreign exchange reserves, gold and claims on the International Monetary Fund (IMF).

From end-2003 to end-2004, foreign exchange reserves increased by NOK 22.3 billion to NOK 211.4 billion. The increase was mainly due to 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, which were larger than the total amount transferred to the Petroleum Fund for 2004.

As a result of the year's allocations, the Adjustment Fund amounts to NOK 46.1 billion. As there are no funds in the Transfer Fund, no transfer will be made to the Treasury.