Canada could adopt negative interest rates within the next two years, Citi says – FINANCIAL NEWS-ecozik.com
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Canada could adopt negative interest rates within the next two years, Citi says

Bank of Canada governor Stephen Poloz. Citi sees a "material risk" that Canada will be one of the central banks to adopt negative rates in the next two years.

Canada might be among a number of countries to adopt negative interest rates in the next 2 yrs as the European policy experiment gains popularity, says a brand new report from Citigroup.

The Bank of Japan earlier this year had become the fifth central bank to go negative, which means it charges banking institutions to deposit money with it. The idea behind negative rates is they make it expensive to hold cash, forcing businesses, consumers and banks to start spending.

Citi economists, led by Ebrahim Rahbari, say within the report that Israel is likely to be the next bank to join the negative rate club this year, but Canada, along with a few others, may also introduce this type of policy in the next 2 yrs.

“In the Czech Republic, Norway and perhaps Canada, an adverse policy rates are not a part of our central scenario, however the chance of an adverse policy rates are material,” write Rahbari and the team in their report.

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