Denmark's Central Bank Raises Lending Rate 25bps to 1.55%

The Danmarks Nationalbank raised its key lending rate by 25bps to 1.55% from 1.30% previously, following a similar move by the ECB.  The Bank also raised the interest on certificates of deposit to 1.20%, the current account rate to 1.10%, and the discount rate to 1.25%.  The Bank said in its press release that "The interest rate increase is a consequence of the increase by the European Central Bank of its rate on the main refinancing operations by 0.25 percentage point to 1.50 per cent."

Denmark's central bank last raised the lending rate by 25 basis points to 1.30% in April this year.  The Danish Central Bank typically follows the moves of the ECB in order to keep its currency, the Krone, stable.  Denmark reported an annual inflation rate of 3.1% in May, up from 2.9% in April this year.  The Danish economy grew at a year on year rate of 1.3% in Q1 2011 (2.9% in Q4 2010).

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