Denmark's Subzero Rate Adventure

Denmark is using negative interest rates to discourage outside capital
The headquarters of Danske Bank, left, stand opposite the Danish central bank in Copenhagen Photograph by Linus Hook/Bloomberg

Plenty of central banks around the world have cut rates almost to zero. Denmark has been even bolder: On July 5 the central bank cut deposit rates to minus 0.2 percent (that’s the rate offered to banks that want to park their funds at the central bank). Earlier, in June and July, Denmark had sold two-year debt with negative yields ranging from minus 0.05 percent to minus 0.08 percent. The country is making banks and investors pay for the privilege of converting their money to kroner. Switzerland, Germany, and France have all sold debt with negative yields recently.

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