Bloomberg

(Bloomberg) -- Scandinavia’s biggest bank estimates Denmark sold almost $750 million in kroner to weaken the currency after it became clear early on Friday that Britons had voted to leave the European Union.

The flight into safe-haven markets triggered by Brexit drove the krone to its strongest level against the euro in more than a decade, forcing the central bank to intervene to defend its currency peg.

The bank probably sold about 5 billion kroner ($744 million) on Friday, according to Jan Stoerup Nielsen, a senior analyst at Nordea in Copenhagen. That follows a resumption of interventions to weaken the krone in May for the first time since February last year, when Denmark’s euro peg was under a speculative attack. Interventions in May reached 23.6 billion kroner.

The bank is due to publish official intervention data on July 4. Foreign reserves are about 42 percent lower than their peak in March last year, when they were almost equivalent to half of Denmark’s gross domestic product. While Switzerland was forced to abandon its euro peg, the Danes prevailed after cutting rates well below zero, halting government bond sales and pouring a record amount of kroner into the market to weaken the currency.

To contact the reporter on this story: Christian Wienberg in Copenhagen at cwienberg@bloomberg.net. To contact the editor responsible for this story: Tasneem Hanfi Brögger at tbrogger@bloomberg.net.

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