Market operations

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Daily market operations in the money market

Danmarks Nationalbank introduces buy-back and sale of certificates of deposit on a daily basis in order to support a smooth exchange of liquidity. Also the buy-back premium is raised from 0.05 percentage to 0.10 percentage points. This is to encourage the monetary-policy counterparties to exchange liquidity among themselves.

The measures will take effect as from 1 February 2017.

 

One of Danmarks Nationalbank's main objectives is to maintain stable prices, i.e. low inflation. This is done via the monetary and foreign-exchange policies. In practice, the monetary and foreign-exchange policies are conducted through open market operations in the money market and intervention in the foreign-exchange market.

Activities in the money market
In practice, this is done via the lending and deposit facilities made available by Danmarks Nationalbank to banks and mortgage banks – the monetary-policy counterparties. The most important facilities are the current accounts and the weekly open market operations.

Intervention in the foreign-exchange market
Danmarks Nationalbank may influence the krone exchange rate by intervening in the foreign-exchange market by buying or selling foreign exchange against kroner. The purpose of intervention is to stabilise the krone rate. For example, when Danmarks Nationalbank buys kroner and sells euro, the krone will, all else equal, strengthen against the euro and vice versa.

Danmarks Nationalbank intervenes in the foreign-exchange market by trading with foreign-exchange dealers in Denmark and abroad. Danmarks Nationalbank holds a foreign-exchange reserve for intervention in the foreign-exchange market.

On the second banking day of each month, Danmarks Nationalbank publishes information about the volume of intervention in the previous month. Find the latest press release "Foreign Exchange and Liquidity and Monthly Balance sheet" in the Press room.​