Denmark Exits Negative Rate Regime as Krone Defense Tightens
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Denmark’s central bank showed currency speculators it won’t tolerate any test of the krone’s peg to the euro, ending an experiment with negative interest rates that started in 2012.
Copenhagen-based Nationalbanken raised its deposit rate yesterday, bringing it to 0.05 percent from minus 0.1 percent. It left the lending rate unchanged at 0.2 percent and said it intervened in the currency market, purchasing kroner to support the exchange rate. The move leaves Denmark’s deposit rate higher than the European Central Bank’s, which is at zero.