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(Bloomberg) -- Denmark cut its deposit rate to defend the nation’s currency peg after the Swiss National Bank unexpectedly abandoned the franc’s cap to the euro last week.

The central bank in Copenhagen lowered its deposit rate to minus 0.2 percent from minus 0.05 percent, according to a statement today. The lending rate was cut to 0.05 percent from 0.2 percent.

The move comes amid speculation that Denmark could be forced to follow Switzerland, which had spent the last three years struggling to buy enough euros to support its exchange- rate regime. Denmark has maintained its currency peg for three decades. Its foreign reserves rose to 446.8 billion kroner ($69.9 billion) last month, compared with a high of 514.4 billion kroner in 2012.

To contact the reporter on this story: Peter Levring in Copenhagen at plevring1@bloomberg.net To contact the editors responsible for this story: Jonas Bergman at jbergman@bloomberg.net; Tasneem Hanfi Brogger at tbrogger@bloomberg.net Tasneem Hanfi Brogger

Bloomberg