Duke University Lower Repurchase Rate Paper

In the recent past, some central banks/reserve banks have lowered the repurchase rate — at which commercial banks can both borrow or deposit money — to negative level to improve economic growth. What are the potential benefits and challenges related to such monetary policy decisions? 

The assignment must be word-processed on A4 paper and presented in business report format. It should include in the following order: a letter (or a memo) of transmittal (addressed to the lecturer stating that the assignment report is being submitted and also briefly describing in one or two sentences the significance of the issue/s addressed in the report), executive summary, table of contents, footnotes, appendices and bibliography or list of references. Your report must have a ‘Conclusion’ but not ‘Recommendations’. Please avoid incorporating sub-sections for Purpose, Scope, Methodology, Assumptions, Limitations and Recommendations in your report.

The following outline should help you to prepare the assignment; 

1. Introduction: This part is to clarify the issue and explain what is negative interest rate etc. 

The repurchase rate (repo rate) is the benchmark interest rate at which the Reserve Bank 

lends money to other banks. It is possible that this rate can go to negative level. In fact, some 

countries do have negative interest rates. 

Please remember, you need to do research. There are plenty of literature on the Internet. Do 

not depend on lecture notes alone. (maximum 4 marks) 

2. Then you need to discuss about the countries currently have negative rates and what are the 

results of such rates for each country? Again, you find plenty of literature on the Internet. 

(maximum 5 marks) 

3. In the previous section you have identified countries with negative rates and in this section, 

discuss the potential benefits and challenges of negative rate policies? Then provide a 

conclusion to your analysis. You do not need to give any recommendations. (maximum 5 

marks) 

5. Please provide supporting Charts/Figures/ Graphs (maximum 3 marks) 

6. Before you submit, make sure to have Letter/memo of transmittal, Executive summary, 

Table of contents, Bibliography/Reference, Appendices etc. to your report. (maximum 2 

marks) 

7. Overall presentation gets 1 mark. (If your report is unorganised and messy, you do not get 

this 1 mark)