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The Danish krone (DKK), pegged to the euro, is fully convertible, and money transfers can be sent to Denmark and money transferred from Denmark freely. Funds related to investment in Denmark, both foreign direct investment (FDI) and portfolio investment, may be converted and transferred without restriction.
In line with its anti-money laundering and terrorism financing legislation, Denmark caps the amount of hard currency that may be transported in or out of the country at one time at EUR10,000 or the equivalent in foreign currency.
On Danish exchange platforms, the US dollar (USD) and the euro are the most frequently exchanged currencies, followed by the Danish krone. According to the most recent survey from the Bank for International Settlements, the USD had the highest exchange volume, amounting to an average of US$76.58bn per day in April 2013, followed by the euro (US$56bn/day), the krone (US$19.84bn/day), the Japanese yen (US$15.3bn/day) and the Swedish krona (US$10.37bn/day).
The country’s central bank, Danmarks Nationalbank, sets national monetary policy, monitors the overall health of the financial system, works to maintain the country’s foreign exchange reserves, and ensures the krone’s peg to the euro. The central bank conducts monetary policy by adjusting national interest rates, which affect national lending and deposit rates and can impact the krone’s exchange rate.
An independent authority, the Danish Financial Supervisory Authority (FSA), known locally as the Finanstilsynet, monitors the conduct of the banking and insurance sectors and securities markets. The FSA drafts and enforces legislation on safe financial practices.
Denmark joined the European Union in 1973 and the Schengen free-circulation area in 1996. Although it meets the economic and fiscal criteria for accession, Denmark has opted to stay out of the eurozone, similar to its neighbours Norway and Sweden. Danish voters chose not to adopt the euro in a referendum held in 1992, and again in 2000. The door to eurozone accession remains open, but while the main political parties support such a move, government polling suggests that the majority of Danish voters (an estimated 64% as of December 2013) are still against it.
Denmark’s national currency, the krone (plural: kroner), is held on a fixed exchange rate and linked tightly to the euro. The kroner’s central exchange rate is set at Kr7.46038 per euro, and it is permitted to fluctuate within +/- 2.25% of this mark. Denmark’s economy is tightly intertwined with Europe, and it has been a strong proponent of liberalised trade relations. Exports account for the largest segment of GDP, so the country relies heavily on the foreign exchange market.
The Danish krone (DKK), abbreviated “Kr”, is made up of 100 øre. The central bank issues banknotes in values of 50, 100, 200, 500 and 1000 kroner. Coins are issued in denominations of 50 øre and 1, 2, 5, 10 and 20 kroner.
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