10 MARCH 2016 – In the previous release of System updating in correspondence to negative interest rate, Numerical Technologies has announced the version upgrade regarding support of negative interest rate in correspondence to the unconventional monetary policy in Japan. Understanding the urgent needs from our existing customers, Numerical Technologies initiated the software updating at no additional charge and put a high priority on the task.
It is expected that the issue of previously unsupported negative interest rate for certain products will be addressed in the following version upgrade.
As both fixed and floating interest rate were not allowed to fall below zero, the negative cash flow was not supported previously. Negative cash flow was not supported by external cash flow feature either.
According to the latest upgrade, users now can adopt negative interest rate for both market rate and contract rate. The following is an example of how negative coupon payments are generated in a typical corporate loan using the system.