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What Effect Could a Negative Interest Rate Have Over an Economy?

Discussion in 'Forex Discussions' started by Currency Expert, Jan 29, 2015.

  1. Currency Expert

    Feb 14, 2014
    Likes Received:

    1. What effect would a negative interest rate have over an economy?

    2. Is it positive of negative effect? In addition, what prompts a central bank to reduce their interest rate to negative (-)?

    3. What do they hope to achieve by doing this?

    4. What effect would this have on the fixed deposits or borrowed money in such countries?

    For example, the interest rate in Switzerland is currently negative.

    These are vital questions and answers would be appreciated.

    Thank you.

    Source: www.tallinex.com
  2. platinumtraderfx

    platinumtraderfx New Member

    Oct 24, 2013
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    These changes are implemented for the sake of maintaining economy health I believe. But it depends on the situation and ECB could be wrong. Time will show:happy2:
  3. somefxtrader

    somefxtrader New Member

    Jun 27, 2014
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  4. sininfinity

    sininfinity Active Member

    Apr 4, 2014
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    From your example negative interest rate of switzerland is doing this to devalue their currency. Few years ago CHF had high demand and so they fixed EURCHF rate to 1.20 and they will try to keep that at any cost and they did for 3 years. When they stopped doing that many including broker suffered loss.

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