As expected, Danmarks Nationalbank is following the European Central Bank (ECB) and lowering its interest rates by 0.25 percentage points. This means that the leading interest rate - the certificate of deposit rate - is now 1.60 percent, while the lending rate will land at 1.75 percent. Danmarks Nationalbank announced this in a press release.
The certificate of deposit rate determines how much interest mortgage credit and banking institutions receive by purchasing certificates of deposit from Danmarks Nationalbank. By comparison, the certificate of deposit rate was 3.6 percent almost exactly a year ago.
Earlier on Thursday, the ECB lowered its deposit rate by 0.25 percentage points to two percent. This is the eighth interest rate cut in a year. Danmarks Nationalbank usually follows suit when the ECB changes interest rates. This is because the krone is tied to the euro as a result of the fixed exchange rate policy, and therefore interest rates have to be roughly aligned.
If this does not happen, it could put pressure on the krone, writes Jeppe Juul Borre, chief economist at Arbejdernes Landsbank, in a comment.
The ECB and thus also the Nationalbank implemented a long series of interest rate increases in 2022 and 2023 in an attempt to rein in sky-high inflation. The ECB's deposit rate peaked at four percent, while it was 3.6 percent at the Nationalbank.
/ritzau/
Text, graphics, images, sound, and other content on this website are protected under copyright law. DK Medier reserves all rights to the content, including the right to exploit the content for the purpose of text and data mining, cf. Section 11b of the Copyright Act and Article 4 of the DSM Directive.
Customers with IP agreements/major customer agreements may only share Danish Offshore Industry articles internally for the purpose of handling specific cases. Sharing in connection with specific cases refers to journaling, archiving, or similar uses.
Customers with a personal subscription/login may not share Danish Offshore Industry articles with individuals who do not themselves have a personal subscription to Danish Offshore Industry.
Any deviation from the above requires written consent from DK Medier.
