Pass-through of negative policy rates
Economic Commentaries, News There is a strong link between the repo rate and the interest rates faced by borrowers. This link was strong even when the repo rate was negative. This is demonstrated by Henrik Erikson and David Vestin in the Economic Commentary “Pass-through of negative policy rates”.
Their study examines the co-variation between the Swedish policy rate and a broad set of lending rates during a period when the policy rate has both been cut to negative levels and hiked back up. During the period, the policy rate has had more or less full pass-through to the average lending rate.
Read more in the Economic Commentary “Pass-through of negative policy rates”.
By Henrik Erikson and David Vestin, who work at the Monetary Policy Department of the Riksbank.