October 2, 2017 / 11:59 AM / a year ago

CORRECTED-Rates will rise as economy improves - Denmark c.bank governor

(Corrects current Danish interest rate to -0.65 from -0.75)

LONDON, Oct 2 (Reuters) - Denmark’s deeply negatively interest rates will rise as the economy recovers, central bank governor Lars Rohde said on Monday.

Denmark’s currently has interest rates of minus 0.75 percent and keeps its currency, the crown, close to 7.46038 crowns per euro.

“Higher interest rates are likely to come with a robustly improving macro environment,” Rohde said in a speech at an economics conference in London.

He added that the central bank did not currently see a “speculative housing bubble” anywhere in Denmark, though he added 10 percent-a-year rises in prices could not go on indefinitely without causing problems.

Under the European Union’s Exchange Rate Mechanism (ERM2), Denmark must keep the crown within 2.25 percent of 7.46038 crowns per euro, although in practice it has not moved more than 0.5 percent either way.

Last month Denmark’s central bank raised its economic growth forecasts for 2017 and 2018 and has warned there were some risks of the economy overheating. (Reporting by Marc Jones)

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