Banking
Denmark’s central bank cuts key interest rate to 2.85%, mirroring ECB
Published by Uma Rajagopal
Posted on October 18, 2024
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Published by Uma Rajagopal
Posted on October 18, 2024
COPENHAGEN (Reuters) – Denmark’s central bank cut its key policy interest rate by 25 basis points to 2.85% on Thursday as expected, following the European Central Bank’s decision earlier in the day to reduce 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,” Danmarks Nationalbank said in a statement.
Thereby, the monetary policy spread vis-á-vis the euro area will remain unchanged,” it added.
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 2.85% from 3.10%, while the so-called lending rate was cut by 25 basis points to 3% from 3.25%.
The ECB earlier lowered its deposit rate by 25 basis points to 3.25%, its third cut this year, pointing out that inflation in the euro zone is now increasingly under control and the economic outlook has worsened.
(Reporting by Stine Jacobsen, editing by Jacob Gronholt-Pedersen)