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UPDATE 1-Danish cbank net crown buyer, 1st time in 18 months

Tuesday, 2 Oct 2012 | 12:47 AM ET

* Foreign exchange reserves fell to 513.5 bln DKK in Sept

* Nationalbank says bought net 0.6 bln Danish crowns

* Analysts see rate hike later this year

(Adds context, analyst comment)

COPENHAGEN, Oct 2 (Reuters) - Denmark's central bank said on Tuesday it had intervened in the foreign exchange market in September, becoming a net buyer of the Danish crown for the first time since March 2011.

The country's foreign exchange reserves, a monetary policy tool, fell by 0.9 billion crowns in the month to 513.5 billion Danish crowns ($88.9 billion), the central bank said.

It bought a net 0.6 billion Danish crowns for other currencies to steady the crown in line with its mandate. Since March 2011, it had been either a net seller of the crown or not intervening in the foreign exchange market at all.

Denmark, a European Union member but euro zone outsider, had been attracting investor interest as a safe haven from the euro sovereign debt crisis. But the upward pressure on the crown has eased with renewed EU efforts to contain the crisis.

Analysts said the central bank was seeking to prevent a further weakening of the crown as investors' appetite for risk revived somewhat during September.

"With the support purchase in September, Denmark's Nationalbank has taken its first step towards the first independent Danish interest rate increase since the end of 2008," Nordea analyst Jan Stoerup Nielsen wrote in a note.

He said the intervention was on a rather small scale and that the total net purchase would have to be closer to 15 billion crowns before the central bank took any action on rates.

He added, however, that a rate hike could come within the next three months.

Sydbank also said the net purchase was so modest that the central bank would likely keep interest rates unchanged.

"If the crown weakens further, Denmark's Nationalbank will undoubtedly buy again, and then a hike becomes a reality," Sydbank chief economist Jacob Graven said.

Such actions by the bank tend to precede changes in interest rates.

Denmark's policy of holding the crown steady against the euro means that the central bank shifts interest rates for the sole purpose of keeping the crown around its central parity of 7.46038 per euro . ($1 = 5.7773 Danish crowns)

(Reporting by Mia Shanley and Teis Jensen; Editing by Ruth Pitchford)

((copenhagen.newsroom@thomsonreuters.com)(+45 3396 9649))

Keywords: DENMARK RESERVES/