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Inflation and price development

Exchange rate pass-through to Danish import and consumer prices

This article analyses pass-through of fluctuations in the nominal effective krone rate to import and consumer prices. As regards import prices, pass-through happens already within 1-2 months, although it is not complete. This indicates that some exporters adjust their prices to the Danish market. Pass-through to consumer prices is considerably weaker, reflecting that imports account for only part of private consumption. Furthermore, domestic distributors absorb part of the exchange rate fluctuations in their profit margins. The analysis indicates that pass-through is lower than previously. There are no indications that changes in the effective krone rate lead to a persistent rise in the rate of price increase.