Lower Turnover in the Danish Money Market - Part 1
Monetary review, 4th Quarter 2013
Turnover in the money market has declined in 2013 relative to 2012. This is
evident from Danmarks Nationalbank's annual money-market survey, which is
described in more detail in the article. The decline in activity in the money
market is mainly attributable to lower turnover in uncollateralised overnight
money-market loans. This should be viewed in the light of Danmarks
Nationalbank's introduction of a negative rate of interest on certificates of
deposit in July 2012, and the simultaneous increase of the current-account limits.
Irrespective of the lower turnover in the money market, the monetary-policy
transmission to the overnight interest rate remains intact. The higher currentaccount
deposits have reduced the impact of changes in liquidity conditions on
the interest-rate formation in the overnight market, compared with previously.
The article illustrates the transmission to the overnight interest rate.