Engelsk

On 5 December, Governor Lars Rohde gave a speech at the Annual Meeting of Finance Denmark. The speech focused on liquidity, economic dampening and a look back.

​In November 2022, the foreign-exchange reserve increased by kr. 13.5 billion to kr. 577.2 billion. For settlement in November, Danmarks Nationalbank's net purchase of foreign exchange due to intervention in the foreign-exchange market amounted to kr. 3.7 billion.

The financial markets are characterised by high inflation, higher interest rates and considerable volatility. Higher interest rates, high inflation and the prevalence of risky loan types, combined with declining property prices, will lead to credit losses in banks. The weaker economic outlook underlines the need for prudence in the institutions’ capital planning.

These are turbulent times with considerable market fluctuations, high inflation and higher interest rates. This calls for strong liquidity management throughout the financial sector, according to a new analysis from Danmarks Nationalbank.

The market value of 30-year fixed-rate mortgage bonds fell steadily up until October this year. There are several reasons for this: The price of the bonds fell in connection with increasing market rates, while the redemption of low-yield bonds has exceeded the issuance of high-yield bonds.

The banks’ lending to Danish businesses has been increasing and has increased by 20.1 per cent over the past year to kr. 521.6 billion. However, this year-on-year growth rate has slowed slightly since Au-gust, when it peaked at a whopping 27.9 per cent. This is the highest year-on-year growth for bank lending to businesses in recent times. Before this, the highest measured growth rate was 26.6 per cent in July 2006.

Greenland has a booming economy and a marked need for foreign labour. Price increases remain modest due to the country’s special energy infrastructure. Although the Greenlandic economy is doing well, the Greenlandic politicians need to address a number of major challenges if growth is to continue. Fiscal policy is clearly unsustainable in the longer term and, in future, public expenditure cannot be funded under the current taxation rules. There is a growing need for reform of, e.g., the tax system and the education system.

On 23 November, Governor Lars Rohde held a presentation at The Danish Chamber of Commerce. In his presentation, he gave his view on the current economic situation. (The presentation is in Danish only).