Foreign Exchange and Liquidity and Monthly Balance Sheet, December 2020

Foreign Exchange and Liquidity and Monthly Balance Sheet, December 2020

Authors	Danmarks Nationalbank
Subject	Press releases from Danmarks Nationalbank
Type	Press Releases
Year	2021
Published	5 January 2021

​In December 2020, the foreign-exchange reserve decreased by kr. 16.8 billion to kr. 439.6 billion.

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THE FOREIGN-EXCHANGE RESERVE

In December 2020, the foreign-exchange reserve decreased by kr. 16.8 billion to kr. 439.6 billion. The decrease reflects Danmarks Nationalbank's net sale of foreign exchange for kr. 0.1 billion, and the central government's net repayment of foreign debt for kr. 16.7 billion, cf. table 1.

In December, Danmarks Nationalbank has not intervened in the foreign exchange market.

Danmarks Nationalbank's net foreign-exchange purchases and the change in the foreign-exchange reserve - table 1

Kr. billion	December 2020	January 2020 - December 2020
Danmarks Nationalbank's interventions* to purchase foreign exchange, net	0.0	-77.7
Other**	-0.1	-6.3
Danmarks Nationalbank's net foreign-exchange purchases	-0.1	-84.0
The central government's net foreign borrowing***	-16.7	82.4
Change in the foreign-exchange reserve	-16.8	-1.6

Note: Details may not add because of rounding and previously published figure may have been revised. All transactions as per settlement date.

* Intervention takes place when Danmarks Nationalbank purchases and sells foreign exchange for Danish kroner in the foreign-exchange market in order to stabilise the exchange rate.

** Comprises e.g. interest accrued on the foreign-exchange reserve, the central government's net payments in foreign exchange, and changes in the banks' deposits in euro-denominated accounts at Danmarks Nationalbank.

*** Including net payments to the central government in foreign exchange as a result of currency swaps.

DEVELOPMENT IN LIQUIDITY

In December, the central government's net financing requirement amounted to kr. 18.2 billion. Since the turn of the year, the central government's net financing requirement has been kr. 110.7 billion, cf. table 2.

The net position of the banks and mortgage-credit institutes vis-à-vis Danmarks Nationalbank increased by kr. 28.5 billion in December, to an outstanding amount of kr. 164.0 billion. In December, the central government's liquidity impact increased the net position by kr. 28.7 billion.

Impact of various factors on the net position of the banks and mortgage-credit institutes via-a-vis Danmarks Nationalbank - table 2

Kr. billion	December 2020	January 2020 - December 2020
The central government's net financing	18.2	110.7
Redemption on domestic central-government debt*	4.5	101.9
Net bond purchases by the government funds and own portfolio and financing of social housing	0.6	14.5
Other**	0.4	1.1
The central government's gross domestic financing requirement	23.6	228.1
The central government's gross domestic borrowing***	-5.1	211.8
The central government's liquidity impact	28.7	16.3
Danmarks Nationalbank's net foreign-exchange purchases	-0.1	-84.0
Danmarks Nationalbank's net bond purchases	0.0	1.1
Other factors****	-0.2	0.0
Change in net position	28.5	-66.6

Note: Details may not add because of rounding and previously published figure may have been revised. All transactions as per settlement date.

* Including krone-denominated payments by the central government in currency swaps.

** Comprises foreign net financing requirement and changes in net collateral for the government's swap portfolio.

*** Gross long-term borrowing, net short-term borrowing and krone-denominated payments to the central government in currency swaps.

**** Comprises e.g. changes in banknotes and coins in circulation.

DANMARKS NATIONALBANK'S INTEREST RATES

Since 6 July 2012 the discount rate has been 0,00 pct. p.a., since 1 June 2012 the current-account interest rate has been 0,00 pct. p.a., since 20 January 2015 the lending rate has been 0,05 pct. p.a. and since 20 March 2020 the rate of interest on certificates of deposit has been -0,60 pct. p.a.

Enquiries can be directed to press advicer Ole Mikkelsen on tel. [phone].

BALANCE SHEET OF DANMARKS NATIONALBANK 31 DECEMBER 2020

Assets	2020	2020
1000 kr.	31/12	30/11
Stock of gold	21,672,570	21,672,570
Foreign assets	395,729,288	416,182,259
Claims on the International Monetary Fund	23,543,443	22,850,996
Claims related to banks' and mortgage credit institutes' TARGET accounts in ECB	36,536	32,878
Monetary-policy lending	-	20,000,000
Other lending	3,931,681	1,184,875
- Banks'1)	3,931,681	1,184,875
- Miscellaneous loans	-	-
Domestic bonds	33,233,788	33,233,788
Financial fixed assets, etc.	130,748	130,748
Tangible and intangible fixed assets	680,132	679,916
Other assets	1,108,172	1,085,134
480,066,358	517,053,164

1) Other lending to banks include loans for cash deposits. In addition, the item includes balances with Danish banks in connection with swap agreements with central banks. The claim amounts to kr. 2.2 billion.

Liabilities	2020	2020
1000 kr.	31/12	30/11
Banknotes	68,389,053	67,118,723
Coins	6,134,283	6,135,241
Monetary-policy deposits	164,003,464	155,552,562
- Current accounts	29,568,464	28,303,562
- Certificates of deposit	134,435,000	127,249,000
Other deposits	9,280,252	7,570,283
- Deposits related to banks' and mortgage credit institutes' TARGET accounts in ECB	36,536	32,878
- Other deposits from banks' and mortgage credit institutes'	1,517,598	1,984,971
- Miscellaneous deposits	7,726,118	5,552,434
Central government	136,875,182	182,300,137
Foreign liabilities	1,344,478	4,305,490
Counterpart of Special Drawing Rights allocated by the IMF (SDR)	14,137,490	14,137,490
Other liabilities	116,688	147,770
Capital and reserves	79,785,468	79,785,468
480,066,358	517,053,164

2) The balance sheet item includes balances in connection with swap agreements with central banks. The deposits amount to kr. 2.2 billion.

Note: The monthly balance sheet is calculated at beginning of year values +/- accumulated transaction values. The monthly balance does not include value adjustments and accruals, as these are only calculated at year-end, cf. Danmarks Nationalbank's accounting principles.