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Negative interest rate

Updated: Aug 20, 2021

A charge levied by a central bank on deposits by commercial banks, sometimes only for balemces in excess of a certain amount. A negative interest rate has been used by the national central banks of Denmark (since 2012), Japan (2016), Sweden (2009), Switzerland (2014), and the European Central Bank (2014). Central banks use a negative interest rate to prevent currency appreciation or to counter low inflation or deflation.

Reference: Oxford Press Dictonary of Economics, 5th edt.

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James Knight
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James is a lead content editor for Invezz. He's an avid trader and golfer, who spends an inordinate amount of time watching Leicester City and the… read more.