The International Monetary Fund (IMF) has said in its latest blog post on Thursday that negative interest rate policy has been successful in easing financial conditions and thus stimulating economic growth, which could lead many central banks to consider interest rates negative “sooner or later”.
Key Comments:
“Experience so far has shown that negative rates probably supported growth and inflation“.
“Possible side effects, such as the risks of destabilizing the banking system and disrupting market functions, have not materialized to a large degree”.
“In summary, the evidence so far indicates that negative interest rate policies have managed to ease financial conditions without causing worries important on financial stability “.
“Central banks that have adopted negative rates can lower them further … Ultimately, given the low level of the neutral real interest rate, many central banks may be forced to consider negative interest rate policies sooner or later“.
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