It seems that Central Banks are in a worldwide hurry to decrease their target interest rates, so in many countries real interest rates are negative, becuase inflation rates are high. Wouldn’t it make sense that Central banks actually increase interest rates so that they become positive again and encourage savings?
Not exactly. The central bank should just stop creating money. In other words it should stop setting the interest rate. Given that the market interest rates are higher than the one from the central bank then the banks would see an increase in interest rates.
So the optimal strategedy is to just stop period.
if the central bank set a high rate.(20% annually - example). it would quickly cease to set the market rate and it would be almost as good as it not existing.