Business, Legal & Accounting Glossary
The monetary policy of maintaining a nominal interest rate of 0%.
This is the monetary policy of a maintaining a nominal interest rate of Zero per cent (0%).
Once a zero interest rate has been achieved it’s not possible to stimulate the economy by reducing the interest rate any further.
This means that other forms of monetary policy, such as qualitative easing (for example), will have to be used instead.
However, in exceptional circumstance, a monetary policy authority may be able to push key interest rates below zero within the short term.
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This glossary post was last updated: 6th May, 2019 | 2 Views.