Denmark's currency loses appeal for top commercial fund

Copenhagen

THE return on krone-denominated assets is now so low that Denmark's biggest commercial fund no longer finds them attractive.

Central bank efforts to prevent the krone strengthening beyond the limits of its peg to the euro have forced it to cut interest rates four times this year and deliver record currency-market interventions. The key deposit rate is minus 0.75 per cent, matching Switzerland's, and foreign reserves are equivalent to more than 35 per cent of gross domestic product. Yields on government bonds as long as five years are negative and Denmark has suspended debt auctions to reduce supply and keep investors out.