Economists surveyed by Bloomberg News expect Denmark's central bank to raise its key current account rate by 25 basis points on Thursday, moving the rate from 1.60% to 1.85% at 5 p.m. in Copenhagen. The anticipated action is widely seen as following a comparable rate increase by the European Central Bank.
The survey found unanimous expectation among six economists that Nationalbanken will implement the increase. The decision is being framed within the context of maintaining the krone's fixed relationship to the euro.
This week the Danish currency weakened to its lowest level in six years. Economists noted that Nationalbanken has not recently intervened in foreign exchange markets by buying kroner. Such currency purchases are typically the first response used before an independent policy rate adjustment is chosen.
"I interpret that as a signal that the Danish central bank does not currently consider it necessary to defend the krone," said Oscar Norgaard, economist at Jyske Bank A/S.
Nationalbanken operates under a mandate to maintain a fixed exchange rate to the euro and officially manages the krone within a 2.25% band around 7.46038 per euro. In practice, the central bank aims for a noticeably tighter trading range than the formal band allows. The bank does not hold regularly scheduled policy meetings; instead, it typically sets rates a few hours after the European Central Bank announces its decisions.
The Bloomberg survey named the economists who participated: Soren Kristensen of AL Sydbank A/S, Jens Naervig Pedersen of Danske Bank A/S, Oscar Norgaard of Jyske Bank A/S, Jan Storup Nielsen of Nordea Bank Abp, Jes Asmussen of SJF Bank A/S and Sune Malthe-Thagaard of Totalkredit A/S.
Background and context provided by survey responses
All six polled economists expect the 25 basis-point increase to 1.85% to be announced at the specified Copenhagen time, consistent with the timing pattern Nationalbanken follows relative to ECB decisions. The krone's recent slide to a six-year low and the absence of recent kroner purchases by the central bank were highlighted by respondents as notable developments in the current policy backdrop.
The central bank's dual practices - adherence to the formal 2.25% band and informal targeting of a narrower range - were reiterated in the survey as the operational framework guiding its interventions and rate decisions.