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IMF: Negative interest raised inflation and reduced currencies


yota691
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IMF: Negative interest raised inflation and reduced currencies

IMF: Negative interest raised inflation and reduced currencies
The IMF report indicated that lending rates have fallen "albeit less than the interest rate"
 
 04 August 2017 12:22 PM

Direct: The International Monetary Fund said negative interest rates by central banks led to high inflation and weak currency values.

An IMF research report said Friday that so far the monetary policy that uses the negative interest rate has worked well, with currency devaluation and government bond yields falling.

Several central banks, such as the European Central Bank, the Swiss and the Japanese, have approved negative interest rates on their bank deposits in an effort to stimulate the economy and grow after the global financial crisis.

At the lending rate, the report said lending rates have fallen "although they are lower than the interest rate," adding that banks have benefited from lower funding costs.

The IMF, which studied the negative interest rate in the eurozone, Japan and Denmark, believes that most commercial banks have maintained their profits under this policy.

On the other hand, the IMF believes that if interest rates persist for a long time, the effectiveness of fiscal policy and the stability of the financial system will be at risk in that case.

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