Interest Rates and Denmark

Denmark: This is after it tried cutting interest rates and buying up its own currency. The Danish central bank has pushed its interest rate deeper into negative territory to a record low of -0.5% after three rate cuts in two weeks - the last being triggered by the Swiss giving up their three-year euro cap. , according to BBC. By taking itself out of debt markets, the number of top rated sovereigns in Europe has dropped from six to five since Denmark is one of the half dozen that still holds an AAA rating from all three major rating agencies. Denmark has certainly taken some unusual steps to defend the krone. It surprisingly suspended sales of all government debt to close down an avenue for investors to buy its currency. So, Denmark borrowing cost - the yield on 10-year government bonds - has dropped to the lowest in the world, apart from Switzerland which has a negative yield. Were it to borrow, Denmark would pay only 0.16%, which is lower than Germany at 0.31% and even Japan at 0.36%. Germany borrowing costs, by the way, fell below Japan for the first time today, so it looks worrying as the eurozone benchmark bond is experiencing deflationary pressures. (news.financializer.com). As reported in the news.