Glossary Term


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Negative Interest Rate Policy is a banking framework in which consumers that deposit their cash money in a bank account, sustain negative charges for keeping it there. The purpose of this policy is to make money move, incentivising its use in the economy rather than just sitting in a savings account. It also incentivizes banks to lend money to people and businesses in order to receive the interest incurred on the loan. Nobody wants to suffer a loss on their savings when the only thing they’re doing is keeping it in a bank account so negative interest rates in theory encourage economic activity.

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What is NIRP? A Traders Expert explanation

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