In a move to maintain the currency peg to the euro, Denmark's central bank, Nationalbanken, is anticipated to cut its key rate by a quarter point later today. According to a group of economists surveyed by Bloomberg News, the rate is expected to decrease from 2.85% to 2.6% at 5 p.m. local time in Copenhagen. This adjustment follows a similar rate cut by the European Central Bank and marks the fourth time this year that Denmark has reduced borrowing costs.
The Danish krone has remained close to its central parity rate against the euro, and economists note that there has been no need for the central bank to intervene in the currency market as of yet. The anticipated action by Nationalbanken is to keep the current spread of 40 basis points below the euro-area's key deposit rate. This decision comes as part of Denmark's ongoing efforts to align its monetary policy with that of the European Central Bank to ensure stability in the exchange rate.
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