Denmark tests QE as central bank seeks new ways to save its euro peg

Copenhagen

DENMARK is now exploring unconventional policy steps to protect its euro peg after an unprecedented series of interest-rate cuts failed to deter investors and speculators from hoarding kroner.

"We're addressing what measures to take continuously," Karsten Biltoft, head of communications at the central bank in Copenhagen, said. The bank, home to the unit that manages debt issuance for AAA-rated Denmark, said on Friday it will suspend bond sales until further notice in an effort to shut one channel through which investors had been buying kroner. The decision followed talks with the Finance Ministry and comes after Denmark sold enough bonds to cover its 2015 borrowing need, the bank said.