In a bid to revive stagnant post-financial crisis economies and spur inflation, central bankers globally ventured into uncharted territory in the 2010s by pushing interest rates into negative territory.

However, this experimental phase has now drawn to a close. Japan, as of Tuesday, became the final nation to abandon its negative interest rate policy, once deemed unthinkable, as a means to tackle an economy mired in slow growth and deflationary pressures.

The landscape for central bankers in the 2020s presents a stark contrast, with inflation emerging as the primary concern rather than deflation.

Consequently, there appears to be little justification to persist with such unconventional policies, Axios reported.

Beyond shifting economic dynamics, the overall impact of Negative Interest Rate Policies (NIRP) has proven to be mixed, potentially dissuading central banks from revisiting sub-zero rates.

On Tuesday (overnight U.S. time), Bank of Japan governor Kazuo Ueda announced the institution’s first rate hike in 17 years.

This move marks a significant shift, nudging the policy rate into positive territory—albeit marginally—from its previously negative standing of -0.1%, hovering around zero to 0.1%, marking the first positive rate since 2016.

Written by B.C. Begley