Staff Papers are analyses, method descriptions and other professional contributions prepared by employees of Danmarks Nationalbank. Staff Papers are approved by the relevant Head of Department. The content expresses only the authors' own conclusions and should not be construed as an expression of Danmarks Nationalbank's opinion.
Corporations play a key role in the Danish krone market
Non-financial corporations in Denmark are the largest net buyers of kroner in the Danish krone market. Using detailed microdata and econometric models, we map the demand for kroner from corporations and show that their krone purchases are driven by net exports, in particular goods exports produced in Denmark. The net krone purchases made by corporations tend to imply a strengthening of the krone exchange rate. The impact of krone trades by corporations on the Danish krone exchange rate varies over time, but over the past 20 years it has been roughly the same compared to krone trades by the Danish insurance and pension sector and foreign market participants. However, the involvement of corporations in episodes of sudden pressure on the krone has been limited, as their demand for kroner is more stable relative to the other sectors.
Staff Papers are analyses, method descriptions and other professional contributions prepared by employees of Danmarks Nationalbank. The content reflects solely the authors' own conclusions and should not be interpreted as representing the views of Danmarks Nationalbank.