Posted By Global Banking and Finance Review
Posted on March 6, 2025
COPENHAGEN (Reuters) - Denmark's central bank cut its key interest rate by 25 basis points to 2.10% on Thursday, following the European Central Bank's decision earlier in the day to cut euro zone rates.
"The interest rate reduction is a consequence of the reduction by the European Central Bank of its main monetary policy rate, the deposit facility rate, by 0.25 percentage point," the Danish central bank said in a statement.
"Thereby, the monetary policy spread vis-a-vis the euro area will remain unchanged," it said.
The European Central Bank cut interest rates earlier on Thursday and kept the door ajar to more, even as a looming trade war with the U.S. and plans to boost military spending drive Europe's biggest economic policy upheaval in decades.
The primary mandate of the Danish central bank is to keep the crown currency stable versus the euro, an objective it upholds through currency interventions and interest rate moves.
Denmark's benchmark current account interest rate and the certificate of deposit rate were each cut by 25 basis points to 2.10% from 2.35%, while the so-called lending rate was cut by 25 basis points to 2.25% from 2.50%.
(Reporting by Jacob Gronholt Pedersen, editing by Terje Solsvik)