The Era Of Negative Interest Rates Has Begun

In a bid to counter weak growth and prevent deflation, European Central Bank chief Mario Draghi has lowered main interest rates. Specifically, the ECB cut the deposit rate to -0.1%, from 0.0%, effective June 11. This is a historic development, as it’s the first time a major central bank has cut any main interest rate to negative in a bid to spur lending and spending. The idea is that if banks aren’t being rewarded with a good deposit rate by parking their reserves at the central bank, then they will be more likely to lend it to households and businesses.  READ

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