In our view, negative real interest rates for such a long time structurally damaged the savings performance of the economy. In 2008, when the impact of the global financial crisis became evident, we reduced interest rates sharply to 5.5 percent. In 2009, inflation spiked to over 11 percent, leaving real interest rates highly negative.
As the crisis abated, real interest rates increased, but remained negative for several years and only in late 2014 did they become positive. In our view, this was the correct response to the global financial crisis. It helped mitigate the effect of the crisis on workers and on firms. Together with counter-cyclical fiscal policy, monetary policy helped to support the recovery.