COPENHAGEN: Denmark resumed the sale of Treasury bills after a two-month suspension,as the Denmark accepted bids for 1.1 billion kroner in three and six month bills in auction. Earlier the agency had rejected all bids in the previous three auctions.
The central bank this year introduced unprecedented measures to fight speculation that it would have to drop the krone’s three decade-old peg after Switzerland on Jan. 15. abandoned its cap to the euro. Denmark has spent a record 275 billion kroner on interventions, suspended government bond sales and cut its key deposit rate to minus 0.75 percent.
“It’s surprising that they sold T-bills as we had expected they would wait amid concerns the pressure on the krone could return,” said Jan Stoerup Nielsen, analyst at Nordea Bank AB. “There’s no other way to see this but as a sign that the central bank is now moving toward normalization.”
The krone weakened to 7.4691 per euro as of 11:14 a.m. in Copenhagen, the lowest since 2001 according to closing prices. It has fallen about 0.5 percent from a high in January. The central bank targets keeping the krone at 7.46038 per euro inside a 2.25 percent band.
