Longest Negative Rate Reveals Doubtful Stimulus Effect: Chart

Denmark's deposit rate has been negative since mid-2012.

Denmark’s negative rate experiment -- the longest in the world -- is revealing some unexpected outcomes. Private-sector investment is slowing, savings are on the rise. The government recently slashed its economic forecast for 2016 to 1.1 percent from 1.9 percent. And as for inflation, there is none. Consumer prices stagnated in March, annual data show. The central bank says the policy is a success because its only mandate is to defend the krone’s peg to the euro. But some estimates suggest Denmark is now resuming currency interventions for the first time in more than a year as policy makers again struggle to weaken the krone.

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