The Danish central bank has reduced its benchmark interest rate by 25 basis points, aligning its actions with the European Central Bank (ECB) to maintain the Danish krone's peg to the euro. The central bank announced that the current account rate would be lowered from 2.6% to 2.35%. This marks the fifth rate cut in the current cycle, following the ECB's similar rate reduction just hours earlier.
The market widely anticipated this move by the Danish central bank, with all seven surveyed economists predicting that the bank would maintain the current interest rate differential with the ECB. Despite the Danish krone falling to a six-month low last week, it remains close to the central rate, and the central bank has not needed to intervene in the foreign exchange market in recent months.
