In an August 2018 working paper titled “Monetary Policy with Negative Interest Rates” by the International Monetary Fund, the authors discuss how central banks can design and operate a system where interest rates could be far more negative than they are today. As interest rates drop too far below zero, it makes sense for deposit holders to move their money out of banks and into cash, resulting in a limit to how low central banks can reduce interest rates, as people and businesses will hoard cash. The proposed solution sees a mechanism where negative exchange rates are applied to both
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