Tuesday, March 03, 2015

Currency Wars

“Negative rates might send investors in search of better returns abroad, leading to depreciation of the currency. That would raise the price of imports, helping to combat deflation and giving a growth-enhancing boost to exporters. Since the ECB introduced negative deposit rates the euro has fallen against the dollar by nearly 20%. It is no coincidence that the Danish central bank has pursued negative interest rates so zealously—its sole objective is a fixed exchange rate with the plunging euro.”

Why negative interest rates have arrived—and why they won’t save the global economy

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