January 16, 2015 / 10:35 AM / 5 years ago

Swiss 10-year govt bond yield goes negative for first time ever

LONDON, Jan 16 (Reuters) - The yield on benchmark 10-year Swiss government bonds fell below zero for the first time ever on Friday, a day after the Swiss National Bank stunned markets by scrapping the franc’s exchange rate cap and cutting interest rates to -0.75 percent.

The yield on the 10-year bond maturing in July 2025 fell to -0.003 percent, the first time that the benchmark borrowing costs of a developed economy’s government has gone negative.

In effect, this means that investors are paying the Swiss government for the privilege of lending to it over a 10-year period.

Reporting by Jamie McGeever

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