While being able to set significantly negative rates may work smoothly in an economic model, I am less certain how the public would react, particularly given the experience of millennia of positive nominal rates. Not only would such rates be deeply unpopular, there may be unintended changes in behaviour that would dampen the effectiveness of the measure.
This is certainly a point in our favour and will prove useful in Serbia’s attempts to remain an attractive foreign investment destination in the near future of extremely cautious capital spending and restrictions on investments. Thank you for your attention! BIS Review 4/2009  3