Denmark kept interest rates unchanged to strengthen the krone after intervening in the currency markets, opting not to follow the European Central Bank back into negative territory.
The deposit rate was kept at 0.05 percent and the main lending rate was left at 0.2 percent, Copenhagen-based Nationalbanken said today. Danske Bank A/S said late yesterday it expected Denmark to deliver a cut given the scope of the ECB’s stimulus measures. Other banks, including Scandinavia’s biggest, Nordea Bank AB, had predicted no change in rates.
Danish policy makers raised the deposit rate in April, exiting negative territory after almost two years. The ECB yesterday cut its deposit rate to below zero for the first time as ECB President Mario Draghi unveiled a round of measures to help fight the threat of deflation amid a sluggish recovery.