Denmark: DN continues to pile up FX reserves
|- Danmarks Nationalbank bought EUR/DKK in FX intervention for another DKK5.2bn in July.
- It was the sixths straight month of FX intervention, which now totals DKK49.6bn.
- Government deposits declined to the lowest level since February last year.
Danmarks Nationalbank (DN) just published July’s FX reserve and monthly central bank balance sheet data. Among the main highlights were:
- The FX reserve was about unchanged in July at DKK459bn.
- DN bought EUR/DKK in FX intervention for a total of DKK5.2bn in July. It brings total FX intervention since February to DKK49.6bn.
- The government scaled down Commercial Paper issuance by another DKK5bn. Total Commercial Paper issuance now stands at DKK40bn.
- The government’s net financing need was DKK36bn in July – DKK18bn lower than projected in the budget released in May.
- Government deposits shrank to DKK116bn from DKK140bn in June.
DN bought EUR/DKK in FX intervention for a sixth consecutive month. It has now accumulated a total of DKK49.6bn in FX reserves reversing most of the DKK65bn in outflow from March last year. EUR/DKK trade close to the 7.4360 FX intervention level; hence, DN will likely need to make further FX intervention in the coming months. We still expect it will continue until DN eventually cuts rates 10bp.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.