25 Øre – Denmark

In 1966, Denmark's currency situation was defined by its participation in the Bretton Woods system, which pegged the Danish krone (DKK) to the US dollar at a fixed rate of 7.5 DKK per 1 USD. This arrangement, managed by the Danish National Bank, required strict monetary discipline to maintain the parity. The primary economic challenge of the mid-1960s was a persistent and growing current account deficit, driven by strong domestic demand, rising wages, and high levels of imports, which put sustained downward pressure on the krone's fixed value.

To defend the peg, Danish authorities relied on a combination of tight monetary policy, occasional foreign exchange interventions, and restrictions on capital flows. High interest rates were used to attract short-term capital inflows and support the currency, but this also risked stifling domestic investment. Furthermore, Denmark had to maintain substantial foreign exchange reserves, often drawing on standby credits from the International Monetary Fund (IMF) to bolster confidence in its ability to uphold the fixed exchange rate.

The situation in 1966 was one of underlying strain, setting the stage for the greater turbulence that would follow in the late 1960s. While the peg held firm that year, the structural trade imbalances and the inherent pressures of the Bretton Woods system were becoming increasingly apparent. This period highlighted the difficult balancing act between a fixed exchange rate, free capital movement, and an independent national economic policy—a tension that would eventually lead to a major devaluation of the krone in 1967 and contribute to the broader collapse of the Bretton Woods system in the early 1970s.