Denmark Central Bank March Foreign Currency Reserves Decline

Denmark’s currency reserves declined in March as the central bank sold foreign exchange.

Foreign reserves fell by 1.3 billion kroner ($224 million) to 481.9 billion kroner, Copenhagen-based Nationalbanken said today in a statement. There were no interventions in the currency markets, it said.

“The krone seems to be where the central bank wants it,” said Helge Pedersen, chief economist at Nordea Bank AB. “Seems it’ll be quiet in the office this week for the central bank as we’re not expecting them to change rates tomorrow either.”

The krone appreciated through the first quarter after a January rate increase and as Italian political turmoil and the Cyprus bailout renewed concern that the region’s debt crisis would deepen. Denmark emerged as a haven last year as investors hedged against a potential break-up of the euro area.

The bank had through January spent a net 17.1 billion kroner to back the currency as the crisis eased in the second half of last year. It sold 36.9 billion kroner in the first six months of 2012.

The bank, which pegs the krone in a band around 7.46038 per euro, also raised its key lending rate from a record in January to defend the peg. The bank raised its lending rate to 0.3 percent from 0.2 percent and its deposit rate to minus 0.1 percent from minus 0.2 percent.

The krone rose 0.01 percent against the euro in March, after gaining 0.05 percent in February. It slid for seven consecutive months through January.

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