Critical Krone Weakness Paves Negative Rate Exit: Nordic Credit
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The Danish krone has weakened to a critical threshold within its peg to the euro, pushing the central bank in Copenhagen closer to an exit from 18 months of negative rates, according to Nordea Bank AB.
After refraining from interventions for 11 months, Denmark now needs to start buying up kroner and selling foreign currency to defend its peg, Nordea estimates. Those measures will be followed by raising the deposit rate, now at minus 0.1 percent, according to the bank.