NORWAY - The Norwegian Government Pension Fund - Global saw its market value drop by NOK7.2bn (€900m) during the third quarter, despite transfers and investment profits, because of the strength of the Norwegian currency.

According to the fund's interim report, market value of the fund fell to NOK1.932.3trn from NOK1.939.5trn in the three months to September 31 2007.

Norges Bank Investment Management, the fund's investment manager, said new capital equivalent to NOK75.9bn was transferred to the fund in this period, and the return on investment was NOK21.3bn, but a strong krone in relation to the investment currencies decreased the fund's value by NOK104.4bn, said NBIM.

That said, the manager pointed out the shift in the krone exchange rate had no effect on the fund's international buying power.

Overall, the return on the fund was 1.15% in the third quarter.

"There was turmoil in financial markets in July and August," NBIM noted. "Equity prices fell, but this was more than offset by rising bond prices."

But by the end of October, the market value of the fund had passed the NOK2trn mark for the first time to stand at NOK2.008trn, NBIM said.

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