Net international reserves are Norges Bank's main assets, apart from the Government Pension Fund - Global, which does not affect the Bank's results. Norges Bank has liabilities in the form of notes and coins in circulation and domestic deposits from the central government and banks. This balance sheet composition will normally generate a positive return over time. This is mainly because the Bank has substantial capital and liabilities in the form of notes and coins in circulation. The Bank's assets primarily consist of investments that generate a return. However, since assets are largely invested in foreign exchange and liabilities are in NOK, there is a foreign exchange risk that requires substantial capital.

The main items in Norges Bank's profit and loss account are interest and any net exchange gains or losses on the 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 2005 resulted in a gain of NOK 11.0 billion, compared with a gain of NOK 5.7 billion in 2004. Due to the depreciation of the Norwegian krone, foreign exchange reserves translated into NOK showed exchange gains of NOK 8.4 billion in 2005, compared with exchange losses of NOK 10.1 billion in 2004. Exchange gains due to the depreciation of the krone have no effect on the international purchasing power of the foreign exchange reserves.

At the end of 2005, Norges Bank's international reserves amounted to NOK 257.2 billion at market value when taking into account repurchase agreements and deposits. This is NOK 37.8 billion more than at end-2004. This increase is primarily due to returns on the international reserves in 2005. International reserves comprise foreign exchange reserves and claims on the International Monetary Fund (IMF).

As a result of the year's allocations, the Adjustment Fund amounts to NOK 67.5 billion. As there are no funds in the Transfer Fund, no transfer will be made to the Treasury.