What Are Negative Interest Rates?
With a negative rate the holder of the money pays, instead of being paid; for banks it first applied to deposits at the central bank.
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1.What does a negative interest rate mean?
With a negative rate the holder of the money pays, instead of being paid; for banks it first applied to deposits at the central bank.
2.When did the ECB's deposit rate first go negative?
The ECB's deposit rate first went negative on June 11, 2014; it was minus 0.5 from September 2019 and back to zero in July 2022.
3.Why did central banks use negative rates?
The idea was that banks stop parking money and lend it out, which can mean more spending when prices rise too slowly.
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Sources (3)
- European Central Bank: Key ECB interest rates
- Bank for International Settlements: How have central banks implemented negative policy rates? (BIS Quarterly Review, March 2016)
- Eigene Berechnung (synthetisches Rechenbeispiel
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