TIMELINE: Central banks go negative - but to what avail? | Reuters.com
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TIMELINE: Central banks go negative - but to what avail?

Some of the world's biggest central banks have cut rates into negative territory, hoping to boost growth and lift anemic inflation. Here's what they've done and the results they've seen.

  • NATIONAL BANK OF HUNGARY: MARCH CUTS

    Hungary's central bank cut its overnight deposit rate to -0.05 percent in March, although its base rate, considered at the most important benchmark, is still 1.45 percent.


    REUTERS/Stoyan Nenov 
  • DANMARKS NATIONALBANK: PEGGING THE CROWN

    The Danish central bank cut its key deposit rate to -0.75 percent in early 2015 before a hike to -0.65 in January, fighting to keep the crown currency from firming and keeping it pegged to the euro in a narrow range.

    Investors poured cash into Danish assets in January and February last year, betting that the country would abandon its three-decade-old currency peg. However, the central bank held steady.

    The result? Banks haven't passed the negative rates onto households, there's been no unusual increase in the demand for cash and the central bank made a profit of $336.60 million in 2015, mostly as a result of pressure on the crown.


     REUTERS/Daniel Becerril 
  • SWEDISH RIKSBANK: NOT CONVINCED

    Sweden's central bank cut rates to -0.5 percent in February from -0.35, despite a relatively strong economy and concerns that super low rates would further stoke a housing bubble.

    The bank also said it was prepared to intervene on currency markets to stem the krone's rise, despite economists' warnings on getting into a currency war.

    Critics say the latest rate cuts show a too narrow focus on inflation and that they are fueling a rally in house prices and lending. 


  • SWISS NATIONAL BANK: MAKING RECORDS

    Both the of the SNB's key interest rates have been in negative territory since January 2015 - and its deposit rate is the lowest of any central bank in the world.

    However, the SNB's harshest rate had only been applied to just over a third of deposits as of the end of last year because the rest of the cash parked at the central bank was within its exemption threshold. 

    The SNB earned $1.26 billion from its negative interest rates in 2015.


    REUTERS/Ruben Sprich 

  • BANK OF JAPAN: A TORRENT OF CRITICISM

    Facing low inflation and a strong currency, the Bank of Japan cut its key rate to -0.1 percent in January. It also introduced a three-tier deposit rate system and said it was ready to cut rates further if needed.

    The move unleashed a torrent of criticism at the bank. The yen, instead of weakening, has rallied to trade around an 18-month high against the dollar. 

    The Japanese currency has gained more than 10 percent against dollar so far this year.


    REUTERS/Damir Sagolj 

  • EUROPEAN CENTRAL BANK: THE KITCHEN SINK

    The ECB has kept its deposit rate in negative territory since mid-2014. It's been hoping to boost ultra low inflation and spur lending in a region still reeling from its sovereign debt crisis. 

    It's cut rates several times since March 2015 and it's also been buying assets - mostly sovereign debt.

    Still, low oil prices are keeping a lid on price growth and inflation sank back into negative territory, putting the pressure on the ECB to do more and more.



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