The Danish central bank Nationalbanken has announced it is to cut its Lending Rate from 0.30 per cent to 0.20 per cent with effect from May 3.
The 0.10 percentage point reduction to 0.20 per cent once again puts the Lending Rate at its lowest ever level.
“The interest rate reduction is a consequence of the reduction by the European Central Bank of its rate on the main refinancing operations by 0.25 percentage point. The European Central Bank has kept the rate on the marginal deposit facility unchanged,” the Nationalbank said in a statement.
“In the current situation where the monetary policy counterparties have a large need to place funds at Danmarks Nationalbank, the monetary deposit rates determine the money market rates and the exchange rate,” the bank added.
The bank said that effective May 3, its rates were: Lending rate: 0.20 per cent, Certificates of deposit: -0.10 per cent, Current account: 0.0 per cent and Discount rate: 0.0 per cent.
“The rate cut means that the Danish economy can enjoy even lower interest rates,” says Danske Bank Economist Jens Nærvig Pedersen, adding that the cut had been envisaged and thus to a certain degree already factored into the markets.
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Edited by Julian Isherwood