Interest rates change over time depending on market conditions and are a popular monetary tool in helping stimulate the environment in times of economic difficulty or contract the money supply in times of high inflation.

The world is currently going through a global pandemic and therefore all countries are in a unique situation to prevent their economies from collapsing and therefore are adjusting their monetary policies to suit the times. The following are the five countries with the lowest interest rates as of March 2020.

1. Switzerland

The Swiss National Bank reported an unchanged benchmark of a three-month Libor of -0.75%. Inflation for 2019 was 0.57% and is expected to be 0.64% in 2020. GDP growth prediction for 2020 was meant to be between 1.5% to 2%, but now the government expects the economy to contract due to the Coronavirus pandemic. Switzerland has maintained the same interest rate for the last five years.

2. Denmark

The primary interest rate in Denmark is the certificates of deposit rate set by the Central Bank of Denmark. The current rate is -0.60%, which is a slight increase from the previous level of -0.75%. This is in contrast to other nations that have been relaxing monetary policy in response to the Coronavirus. Inflation in 2019 was 1.3% and is expected to be 1.5% in 2020.

3. Japan

The Bank of Japan reported an unchanged interest rate of -0.1%. The government will increase its purchasing of riskier assets and corporate bonds to reduce the economic damage from the Coronavirus pandemic. The government is also offering loans against corporate debt as collateral with rates set at 0%. Japan's inflation rate in 2019 was 0.99% and is expected to be 1.3% in 2020.

4. Sweden

The central bank of Sweden reported a benchmark interest rate of 0%. The main interest rate in Sweden is the repo rate; the rate at which banks can borrow from the central bank for seven days. Sweden's central bank will be purchasing additional securities this year to sure up its economy against the pandemic and offering increased loans to banks. Sweden's interest rate was increased to 0% in late 2019 from -0.25%, which was the end of a five-year run of negative interest rates. Sweden's interest rate in 2019 was 1.74% and is expected to be 1.46% in 2020.

5. Spain

Spain is part of the European Union so its interest rate is set by the European Central Bank. The current rate for Spain is set at 0%, its rate for the last four years. This is the same rate for the entire European Union. Spain's inflation rate in 2019 was 0.68% and is targeted at 1.05% for 2020.

The Bottom Line

The majority of the countries on this list have a negative interest rate. The countries in the European Union, currently have an interest rate of zero. The country with the lowest interest rate after the European Union's 0% rate is the United Kingdom, at 0.1%, followed by the U.S. at 0.25%.

The world is currently going through an unprecedented time due to the Coronavirus pandemic and countries are changing monetary policy to prevent an economic collapse. However, most rates have stayed fairly static from before the pandemic but this could possibly change depending on how the pandemic proceeds.