Switzerland fired the latest salvo in the currency wars this month.
Alarmed that the collapse of the Russian ruble — and other currencies — could drive up the Swiss franc, the Swiss National Bank took the extraordinary step of slapping a negative interest rate of 0.25% a year on deposits.
To clarify: This isn’t an interest rate charged on loans. It isn’t an interest rate paid on deposits. It’s an interest rate charged on deposits. Putting Swiss francs in a bank account will cost you 0.25% more than keeping them under the mattress.
So much for all those Nobel Prize-winning economists who told us you couldn’t cut interest rates below zero.
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