Denmark cuts interest rate to record low
COPENHAGEN (AFP) - Denmark's central bank on Thursday said it had shaved 0.10 percentage points off its benchmark interest rate to a record low of 1.05 percent.
The new lending rate will come into force on Friday, the bank said in a statement.
"The interest rate reduction is a consequence of purchases of foreign exchange in the market during a longer period," it said.
The bank also cut the current account rate by 0.10 points to 0.70 percent, the rate on certificates of deposit by 0.10 points to 0.80 percent and the discount rate by 0.25 points to 0.75 percent.
Lower interest rates mean lower returns for investors and so normally lead to a weakening in a currency.
Denmark is a member of the European Union but is not a part of the 16-nation eurozone, where interest rates are set by the European Central Bank.
The Scandinavian country has a fixed exchange rate policy with the euro that allows the krone to fluctuate within a 2.25 percent range.
Last Updated (Thursday, 14 January 2010 19:03)
