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How is the Danish krone pegged to the euro?

Central rate and fluctuation band

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Short answer

The Danish krone takes part in ERM II at a central rate of 746,038 kroner per 100 euro. Denmark has agreed with the European Central Bank on a narrow band of plus or minus 2.25 %, which means the krone can move between 729,252 and 762,824 kroner per 100 euro. Since the late 1990s Danmarks Nationalbank has in practice kept the krone much closer to the central rate. Against other currencies, such as the US dollar, the krone floats freely.

Danish kroner and euro

Why

  1. Denmark has had a fixed exchange rate policy since 1982.
  2. The central rate has not changed since January 1987.
  3. The normal ERM II band is 15 %, Denmark has 2.25 %.

Details

The peg was first against the German D-mark and later against the euro.

Tip

To compare prices quickly, think of 100 euro as roughly 746 kroner.

What may differ

The rate your bank or card gives you includes its own margin and fees, so it differs from the central rate.

Common misconception

Denmark joined ERM II to prepare for the euro.

What actually happens

Denmark takes part only because ERM II gives a framework for its fixed exchange rate policy, not with a view to joining the euro.

People also ask

  • Does Denmark use the euro?
  • Where is the official krone exchange rate published?
  • Why is Denmark not in the euro?

Sources

This answer is for reference only. Payment rules, limits and fees change, so check the official sources or your bank before you pay.

Danish kroner and euro
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