Negative Interest Rate

Negative Interest Rate

An interest rate paid by a lender to a borrower rather than the other way around. Negative interest rates may occur when the interest rate is below the inflation rate, or when the lender actually pays the borrower more. Negative interest rates occur during periods of high volatility.
References in periodicals archive ?
Release date- 29082019 - Negative interest rate policies have been introduced to stimulate flagging economies but the unconventional monetary strategy may be doing more harm than good.
In other words, negative interest rate means people are paid to borrow other people's money.
The 'cash storage fee' in question plays the role of a negative interest rate which cannot be legal.
According to Jyske Bank, its financial statements are very much affected by the sustained negative interest rate environment and interest expenses for the increasing non-preferred senior debt.
The SNB underlined that it remains willing to intervene in the foreign exchange market as necessary, and that in its view, the negative interest rate remains essential.
In Japan, banks have started to charge fees on some deposit and savings accounts in an attempt to pass the negative interest rate cost from excess reserves to their customers.
A negative interest rate on bank deposits of -25 bp was announced on December 18 (but the decision was to be effective only 1 month later) with the goal of alleviating the pressure building up on the exchange rate floor relative to the Euro that had been in effect since September 2011.
Meanwhile, the BOJ will continue applying a negative interest rate of minus 0.1 percent to part of accounts held by financial institutions at the central bank, the statement said.
The BOJ maintained the 0.1 percent negative interest rate it applies to some of the excess reserves that financial institutions park with the central bank.
In 2014, the Eurosystem (central banks in the euro area including the European Central Bank) broke through the lower zero bound by introducing a negative interest rate policy.
"Negative interest rates are undertaken in order to promote inflation and growth," the bank's economist IoannisTirkides said in an internal document headlined "European Union Watch: negative interest rate policies and the long term effectiveness of monetary policies" seen by the Cyprus Business Mail on Wednesday.
"The aim is clearly to ultimately encourage banks to lend their excess deposits into the real economy," said Keith Wade, chief economist at Schroders, commenting on the Bank of Japan's decision to introduce a negative interest rate policy.