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    ECB announces $14.8 bln currency exchange with Denmark

    AFP
    27 Ekim 2008 - 16:48Son Güncelleme : 27 Ekim 2008 - 16:48

    The European Central Bank announced on Monday a currency exchange, or swap, agreement with the Danish national bank that amounted to 12 billion euros ($14.8 billion).

    The measure was designed to "improve liquidity in euro short-term markets," a brief ECB statement said.

     

    The reciprocal currency arrangement, or swap line, "will remain in place as long as needed," it added.

     

    On Friday, the Danish central bank raised its key interest rates by a half-point to 5.50 percent to support the beleaguered krone as Denmark paid a price for staying outside the eurozone.

     

    Like non-eurozone neighbors Sweden, Iceland and Norway, Denmark has seen its currency come under fierce pressure as investors dump the krone in favor of bigger and safer currencies.

     

    The ECB swap agreement with Denmark follows one between the ECB and Hungary, where extensive borrowing in foreign currencies were a major contribution to that country's currently dire financial straits.

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