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Inflation & Prices

Danish Inflation Frustration Boils Over to Spark Euro-Peg Debate

  • Danish central bank’s policy is to steer krone, not inflation
  • Some economists have called for debate over monetary policy

In Denmark, frustration over the central bank’s inability to respond to surging prices has sparked the first real discussion in at least three decades about the krone’s peg to the euro.

The Nordic country’s central bank has no inflation mandate, instead focusing on keeping its currency tied to the euro in a tight band with the ultimate goal of ensuring economic stability. That’s worked well when prices hardly moved.