First of, I’d like to state that I’m not an economist. (Duh) However, I do share a certain fascination in matters money and figures. I speak the language.
Has anyone here been following the trend of central banks implementing negative interests on reserves? Quite recently, as seen by Bank of Japan “On January 29th the Bank of Japan (BoJ) said it would cut its benchmark interest rate below zero, to -0.1%, in an attempt to counteract the effects of falling oil prices and China’s slowdown. The BoJ is following the lead of several central banks in Europe, including the European Central Bank (ECB), which first resorted to negative rates in 2014.”
Does this mean they penalise you for depositing money? Instead of paying you an interest?
The aim is to control deflation. Negative interest rates means that the commercial banks in Japan will be paying penalties for depositing money at Bank of Japan. Because of the imminent penalties, they will be forced to withdraw from BoJ and lend to the public
Is today World Economics Day? it is like Amartya Sen, Joseph Stilglitz, Wimliam Easterly and that other guy wa Millenium villages have come to this village.
The rate at which government borrows, rule of thumb being guys who have cash would lend to wanjiku at a higher rate than they would lend government since its assumed governments will always pay.
Inflation, no one would lend you money at a rate lower than inflation
Nothing will happen to the country. Just that it will be more expensive for them to borrow next time. All nations of the world are considered to be sovereign by UN.
Am not very conversant what happened to Greece but from what I know, countries are considered to be sovereign. If you give them loans and they refuse to pay there is nothing much you can do to recover your money.
shida ya Greece ni ati wanatumia euros, since they don’t own the currency they cannot print it at will to pay their debts. With this in mind, they have to borrow the same euros in order to pay matured debt, and this borrowing comes with conditions.