The New Normal Abnormal – Negative Rates
With Bank of Japan being the latest country joining the Negative Rate group, there are a total of 5 countries having the “normal” rates. And i just wonder which country will be next to follow?
Source A: http://www.bloomberg.com/news/articles/2016-02-02/rates-less-than-zero-is-bank-stress-fed-wants-to-test-in-2016
Source B : http://www.cnbc.com/2016/02/12/next-country-with-negative-rates-could-be-canada.html
Central banks that have gone negative: (Source B)
- Bank of Japan: Rate is minus-0.1 percent for some reserves
- Danish National Bank: Deposit rate is minus-0.65 percent
- European Central Bank: Deposit rate is minus-0.3 percent
- Swedish National Bank: Main interest rate is minus-0.5 percent
- Swiss National Bank: Main interest rate is minus-0.75 percent
Start of abnormal being the normal?
Only US has raised the rate back last year. And in my view, there is a worrying trend where more and more countries adopted negative rate. They are …