Danish central bank raises key rate to 0.3%

Updated 25 January 2013
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Danish central bank raises key rate to 0.3%

COPENHAGEN: Denmark's central bank yesterday raised its key interest rate by 0.1 point to 0.3 percent, its first rate change since July.
"The interest rate increase follows Danmarks Nationalbank's sale of foreign exchange in the market," it said in a statement.
The central bank gave no further details on its decision, but Danish monetary policy is aimed at maintaining a stable exchange rate between the Danish krone and the euro.
The krone is pegged to the euro through an agreement known as the European Exchange Rate Mechanism (ERM II), under which the Danish currency can only move 2.25 percent up or down from a fixed rate of 7.46 krone per euro.
The rate hike comes a week before central bank head Nils Bernstein turns 70, the retirement age for Danish central bank governors.
He will be replaced by Lars Rohde, who is currently the chief executive of ATP, Denmark's biggest pension fund.
The change comes into effect on Friday.
The central bank also raised the deposit rate by 0.1 point to -0.1 percent.
The deposit rate was cut below zero for the first time last year to prevent the krone from strengthening too much against the weakening euro.


Saudi issues new Islamic sukuk to finance budget

Updated 24 April 2018
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Saudi issues new Islamic sukuk to finance budget

RIYADH: Saudi Arabia said Tuesday it has completed the issuance of a new Islamic sukuk sale to help finance its budget deficit as the Kingdom accelerates borrowing despite rising oil prices.
The finance ministry’s debt management office said it raised $1.3 billion from the sale of sukuks in three tranches maturing in five, seven and 10 years.
This was the second sukuk sale this year following a $4.8-billion issue it completed last month.
Last week, the Kingdom also raised $11 billion in the sale of conventional bonds. In early March, it struck a deal to refinance a $10-billion loan and added another $6 billion to it.
The OPEC exporter has posted huge budget deficits since oil prices crashed about four years ago and resorted to the debt market to finance the shortfall.
It posted budget deficits totalling $260 billion since 2014 and is projecting a shortfall of $52 billion for this year, according to official figures.
The government debt level, both domestic and international, rose from 1.6 percent of gross domestic product in 2014 to 17.3 of GDP last year reaching $118 billion.
During the same period, the government has drawn down some $245 billion from its fiscal reserves.
Oil income made up more than 90 percent of public revenues before oil began to slide.