1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.

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
    Likes Received:
    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
    Likes Received:
    Currencies rise and fall on speculation and that speculation usually starts with the news. The key here is the fact that market price will change greatly, and it is important to keep an eye on current events. The ECN is particularly ideal for event or news trading where markets can get extremely volatile. current ECN account with Tickmill has fast execution, and low cost transaction suitable for news trading activity since This is vital for event and news trading, where success can depend on you being able to create specific entry and exit points at the price we want.
  4. sininfinity

    sininfinity Trusted Member

    Apr 4, 2014
    Likes Received:
    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.

Share This Page