The article explores how negative interest rates impact money demand and exchange rates in a two-currency model. When people only hold domestic currency, lowering the central bank's deposit rate doesn't affect the exchange rate. But if they hold both currencies, a rate decrease can cause appreciation or depreciation depending on how much the money market rate changes. If bank deposit rates can't go below zero, lowering the central bank's rate leads to currency depreciation no matter the effect on the money market rate.