Work

Negative Policy Rates, Banking Flows and Exchange Rates

Year: 2015

Type: preprint

Abstract: Setting negative nominal rates is one of the unconventional policies implemented after the Great Recession to overcome the Zero Lower Bound. Using data from the euro area and Denmark, I assess the impact of introducing a negative interest rate on reserves. I find that it did put a depreciation pressure on the currency due to a reversal in banking flows. This effect is not only caused by policy differentials, but also by a distinct impact of going into negative territory from lowering interest rates.

Source: RePEc: Research Papers in Economics

Author: Anwar Khayat

Institution: Aix-Marseille Sciences Economiques

Language: English

Topic: Monetary Policy and Economic Impact

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W2250071761

Cites: 26

Cited by:

Related to: 10