Danish National Bank cuts interest rates

Following the European Central Bank’s decision, the Danish National Bank has also reduced its interest rates by 0.25 percentage points. Deposit certificate rates are now at 3.1%, lending rates at 3.25%, and both the current account rate and the discount rate are set at 3.1%. This is the second rate cut by the National Bank this year, after a series of eight consecutive rate increases. The bank usually mirrors ECB’s policy adjustments due to the krone’s peg to the euro. Chief Economist Allan Sørensen from Dansk Industri suggests more rate cuts may be expected, albeit at a slower pace compared to the rate hikes. Homeowners with variable-rate mortgages, especially those with short-term rate commitment, will benefit from this reduction. The next rate revision due at the year’s start could bring even lower rates, notes Jeppe Juul Borre, Chief Economist at Arbejdernes Landsbank. The new rates take effect from September 13.