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.


Oil prices fall on expected output rise after OPEC deal

Updated 10 min 35 sec ago
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Oil prices fall on expected output rise after OPEC deal

SINGAPORE: Brent crude oil prices fell over 1.5 percent on Monday as traders factored in an expected output increase that was agreed at the headquarters of the Organization of the Petroleum Exporting Countries (OPEC) in Vienna on Friday.
Brent crude futures, the international benchmark for oil prices, were at $74.21 per barrel at 0343 GMT, down 1.8 percent from their last close.
US West Texas Intermediate (WTI) crude futures were at $68.40 a barrel, down 0.3 percent, supported more than Brent by a slight drop in US drilling activity.
Prices initially jumped after the deal was announced late last week as it was not seen boosting supply by as much as some had expected.
OPEC and non-OPEC partners including Russia have since 2017 cut output by 1.8 million barrels per day (bpd) to tighten the market and prop up prices.
Largely because of unplanned disruptions in places like Venezuela and Angola, the group’s output has been below the targeted cuts, which it now says will be reversed by supply rises especially from OPEC leader Saudi Arabia. Although analysts warn there is little space capacity for large-scale output increases.
“Several ministers suggested that (rises) would correspond to a 0.7 million bpd increase in production,” said US bank Goldman Sachs following the announcement of the agreement, although it added that were risks “that Iran production may be even lower than we assume” and that its output could fall further due to looming US sanctions.
Still, Britain’s Barclays bank said OPEC’s and Russia’s commitments would take “the market from a -0.2 million bpd deficit in H2 2018 to a 0.2 million bpd surplus.”
Energy consultancy Wood Mackenzie said the agreement “represents a compromise between responding to consumer pressure and the need for oil-producing countries to maintain oil prices and prevent harming their economies.”
In the United States, US energy companies last week cut one oil rig, the first reduction in 12 weeks, taking the total rig count to 862, Baker Hughes said on Friday.
That put the rig count on track for its smallest monthly gain since declining by two rigs in March with just three rigs added so far in June, although the overall level remains just one rig short of the March 2015 high from the previous week.