(Bloomberg) -- Denmark’s central bank is set to cut its benchmark interest rate by 25 basis points later on Thursday to match the European Central Bank, economists said.
All six economists surveyed by Bloomberg News expect Nationalbanken, which doesn’t hold scheduled meetings, to lower its current account rate to 3.10% from 3.35% at 5 p.m. in Copenhagen.
It would be the second cut this year for the Nordic country that pioneered negative rates back in 2012. The Danish central bank typically mirrors its European counterpart on rates to maintain its currency peg to the euro, though it may deviate if the krone becomes too weak or strong.
Despite a period of weakening, the krone is still trading close to its central parity rate, and Nationalbanken has not intervened in the currency market in recent months. The central bank is therefore likely to uphold the current spread of 40 basis points below the ECB’s key deposit rate, economists said.
“The krone has been slightly weaker against the euro in 2024 than in large parts of 2023,” said Niels Ronholt, chief economist at Jyske Bank A/S. “But the weakening has been so controlled that it has not generated reactions from the Danish central bank.”
The following economists participated in the poll: Jeppe Juul Borre of Arbejdernes Landsbank A/S, Jens Naervig Pedersen of Danske Bank A/S, Ronholt of Jyske Bank A/S, Jan Storup Nielsen of Nordea Bank Abp, Palle Sorensen of Nykredit A/S and Soren Kristensen of Sydbank A/S.
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