The National Bank of Denmark follows the European Central Bank and the interest rate by 0.75 percentage points.
On Thursday, the Danish central bank, the National Bank, raised the key interest rate by 0.75 percentage points, from minus 0.1 percent to 0.65 percent. The central bank reports this Homepage.
Thus, the interest rate in Denmark is in the positive for the first time since 2014.
The interest rate hike comes the day after the European Central Bank (ESB) on Thursday lowered the rate from zero to 0.75 percent, ending a year-long period of zero or lower rates. Only once before has the bank raised the interest rate by so much in one fell swoop, and that was a technical adjustment right after the euro was launched in 1999.
Interest rates in both the eurozone and Denmark are being raised as an attempt to combat inflation.
Danmarks Nationalbank maintains a fixed exchange rate policy, which means that the Danish krone must roughly follow the value of the euro. Therefore, it was also expected that the Danish Central Bank would follow up the ESB’s decision.
Awaiting more tax collections
Søren Kristensen, chief economist at the Danish bank Sydbank, believes that it is right that ESB and Danmarks Nationalbank manage to rent.
– Without a large rent increase, in our eyes, ESB would be even further behind than they already were. We are also convinced that there will be more rent increases from ESB at the upcoming meetings, he says to the net newspaper Finans.dk.
Kristensen believes that the rent increase at both central banks sends a signal that they are prioritizing inflation over the economy.
Sydbank expects ESB to have the interest rate at each rent meeting until you end up with a rent of 1.75 percent in the new year. However, they do not believe that the Danmarks Nationalbank will have rented up to that level, and justify this by saying that the Danish krone is too strong.