The negative interest rate policy — an unconventional gambit once only considered by economies with chronically low inflation, such as Europe and Japan — is becoming a more attractive option for other central banks eager to counter unwelcome currency rises.
In Asia, central banks in economies as diverse as Australia, India and Thailand have stunned markets by cutting rates aggressively in response to the broadening fallout from the U.S.-China trade war.
The Reserve Bank of New Zealand — considered a pioneer in central bank policymaking circles since it adopted inflation-targeting nearly three decades ago — floated the possibility of negative rates last week as it, too, slashed rates by a bigger amount than expected — 50 basis points — and sent its currency tumbling to lows not seen in 3½ years.
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