Denmark’s central bank said it didn’t buy kroner to support the currency’s peg to the euro last month, ending five months of purchases sparked by lower demand for haven assets and negative policy rates.
Nationalbanken’s foreign reserves fell by 12.4 billion kroner ($2.16 billion) to 483.2 billion kroner in February, the Copenhagen-based bank said in a statement today. The bank didn’t make any net purchases in “interventions,” it said.
The central bank spent a net 17.1 billion kroner of foreign reserves to support the currency in the five months through January. In the first six months of 2012, the bank sold a net 36.9 billion kroner in reserves to weaken the krone.
The bank, which uses policy to target a krone rate of 7.46038 against the euro, in January raised its key lending rate from a record-low after it deemed defending the currency peg had become too expensive. Last year, the bank fought to weaken its currency in response to a capital influx spurred by investor flight from the euro crisis.
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