Negative Interest Rates

MACROECONOMICS

Submitted to – Professor Venkatraj B

BY GROUP 5,
AKILESH HOLLA – 21005
GREESHMA SHARATH – 21018
PK ANIRUDH – 21030
ROHIT B – 21041
SUPREETHA - 21053
 INTRODUCTION

Efforts to boost financial growth

Borrowers are credited interest

Encouragement for customers and firms to invest or spend

Predicts the possibilities for the future

Central Bank
Switzerland
Swiss central bank joined Denmark and Sweden in implementing NIRP in 2015.
Switzerland’s interest rate currently sits at -0.75%.
Interest Rates over the years

• When SNB decided to keep negative

interest rate in 2021, the decision did
little to influence the Swiss franc or
provide any impetus to USD/CHF.
• Inflation is on rise after economy all over
the world is growing.
• Swiss franc is still highly valued.
 Europe
The European Central Bank introduced its negative interest
rate policy (NIRP) in June 2014 when it decided to cut for the
first time its deposit facility rate below 0%, to -0.1%. Since
then, the ECB has cut its deposit rate four more times, each
time by 10 basis points, to reach -0.5% in September 2019.

EFFECTS OF Negative Interest rate policy

• Potential positive effects on lending, output and ultimately
inflation
• Possible negative side effects for the financial sector
DENMARK

• Negative interest rate in Denmark

• Danish goods are sold at higher prices
• Monetary policy channel of currency rates appears to be operational under NIRP
Are negative interest rates a source of
concern for Denmark's financial
stability?
 • Tools adopted by Central Bank
CONCLUSIO • NRP being part of Monetary Policy
N • Government
• Savers and Retirees
• Increased Credit demand
• Business and Household creditors
THANK YOU!