Macroeconomic round up: IMF endorsing negative interest rates?
Jason Walls breaks down the biggest macroeconomic stories of the week on NBR Radio. With special feature audio.
The International Monetary Fund (IMF) says moves to negative interest rates by some of the world’s central banks might not be as bad as some critics have forecast.
In a paper released this week, the fund said negative interest rates would help deliver extra monetary stimulus as well as helping to ease lending conditions.
Six central banks, included Japan and the European Central Bank (ECB), have experimented with negative rates.
IMF financial counsellor and director of monetary and capital markets Jose Vinals says negative rates will also support demand and price stability.
But he also warned there were “limits to the effectiveness of negative rates.”
If they remained negative for too long, cash settlement would rise, effectively undermining the policy.
In China, low inflation remains a concern.
The consumer price index came in at 2.4% year-on-year in March, below forecasts of 2.5%. The People’s Bank of China target 3%.
The low inflation has prompted more speculation the central bank could be gearing up to inject more stimulus into the slowing economy.
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NBR Radio
Fri, 15 Apr 2016
Fri, 15 Apr 2016
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Macroeconomic round up: IMF endorsing negative interest rates?
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