On the one hand, it influences the inflation expectations for the future, and on the other hand, it triggers shifts in investors’ decisions. This will spill over to other asset markets and also have an impact on the exchange rate.
But as firms and households become more accustomed to paying interest on their deposits, these effects may be attenuated. Of course, there is a limit to how low rates can go. But we have seen that negative policy rates are a viable policy tool in a world of low equilibrium interest rates.