* Denmark raises two second interest rates to boost currency
* Ups CD rate 10 bps to 0.6 pct, current account to 0.5 pct
* Holds main policy rate steady at 1.05 pct
* Economists expect more CD rate increases this year
(Adds details, quotes, byline)
By John Acher
COPENHAGEN, Oct 14 (Reuters) - Denmark's central bank raised two secondary interest rates by 10 basis points on Thursday to bolster the crown currency in its first tightening in two years.
The Nationalbank, which runs a fixed exchange-rate policy, raised its certificate of deposit rate to 0.6 percent from 0.5 and its current account rate to 0.5 percent from 0.4 percent.
But it held its main policy rate, the lending rate, steady at 1.05 percent, 5 basis points above the euro-zone rate.
"The interest rate increase is due to a raise in the short European market rates compared to the equivalent Danish market rates," the Nationalbank said in a statement.
"This development has weakened the crown, and the Nationalbank has intervened in the foreign exchange market to support the crown," said the bank whose mandate is to keep the crown steady within a narrow band to the euro.
The central bank interevenes in the forex market, buying or selling crowns for foreign currency, to strengthen or soften the Danish crown. If that lacks teeth, it changes interest rates.
Analysts have said that the CD rate has become the bank's main policy tool for the time being because banks are depositing money rather than borrowing due to an abundance of liquidity.
So the central bank's lending rate does not have its usual policy effect.
The central bank aims to keep the crown within a band of plus or minus 2.25 percent around its central parity of 7.46038 to the euro, but in recent years the bank has kept the crown closer to parity than its 7.29252 to 7.62824 band allows.
The crown has weakened over the past month through 7.45 and
traded at 7.4560 to the euro
The rate increase to some market participants by surprise, though Nordea Bank had correctly predicted an increase.
"Short interest rates in Denmark have very exceptionally been lower than short interest rates in the euro zone, and the crown has been weakened during the past month so the Nationalbank has intervened in the forex market to support the crown," Nordea Markets senior analyst Troels Eriksen said.
"But intervention was not enough," Eriksen said.
He said that the coming days would show if the rate increase was sufficient to reverse the negative rate spread between Denmark and the euro zone and end the pressure on the crown.
If not, the Nationalbank would not hesitate to raise the CD rate again, he said, adding that he expected no change in the lending rate in the next 12 months.
"NORMALISATION"
Handelsbanken Capital Markets economist Rasmus Gudum-Sessingo said: "Today's move should above all be seen as part of a general normalisation process in the money markets."
He noted that the CD rate was cut to abnormally low levels in relation to the lending rate at a time during the financial crisis when the crown was under pressure when the ECB was pushing liquidity out into the banking system.
"Now it seems that liquidity will be absorbed again at a little faster pace than initially expected," he said.
"The CD rate was cut during the crisis by 55 basis points more than the lending rate, and one must expect several rate rises on this front before the Nationalbank will once again take lending rate into use," Gudum-Sessingo said.
Danske Markets senior forex analyst John Hydeskov said he was surprised by the rate hike.
"They are basing their decision on money markets rising while the Danish markets didn't follow, but I do not believe that will continue," he said. "Today's move is a bit quick."
"We may see more rate increases this year, but in our view it is unthinkable that the lending rate would be increased (in 2010)," Hydeskov said.
(Editing by Ron Askew)
(Additional reporting by Mette Fraende)