Monetary easing, payment modernization, and financial stability in 2025

Danmarks Nationalbank lowered its key monetary policy interest rates on four occasions in 2025 by a total of 1 percentage point, aligning with the European Central Bank's (ECB) rate reductions.

The current account and certificate of deposit rates now stand at 1.60 percent, while the lending rate is 1.75 percent.

This marks the longest period without foreign exchange market intervention since 1982, with no interventions recorded from December 2022 until the end of December 2025.

The krone exchange rate against the euro remained stable around its central rate throughout the year.

Danmarks Nationalbank assesses that monetary policy and overall financial conditions were neutral for economic activity in Denmark in 2025, as the tightening cycle since 2022 was phased out and subsequent easing had its full impact.

The real monetary policy rate remained close to estimates for the neutral real interest rate, despite significant uncertainty.

Danmarks Nationalbank significantly modernized Denmark's payment infrastructure in 2025, migrating Danish krone payments to the pan-European TARGET Services platform.

This move strengthens resilience and harmonizes the payment system within a European context.

Simultaneously, the bank executed several cash initiatives, phasing out 1000-krone banknotes and older series, with kr.

19.7 billion and kr.

873 million redeemed by May 2025.

New Danish coins, featuring H.M. King Frederik X, were launched to gradually replace older currency.

The bank also heightened its focus on resilience and preparedness against hybrid and cyber threats, issuing recommendations to ensure critical societal activities and continuous payment services even in extreme scenarios.