Israel will be the next country to push its interest rates into negative territory, according to an economic analysis from Citibank.Five central banks around the world have dropped their interest rates below zero: the European Central Bank, Denmark, Sweden, Switzerland and, most recently, Japan.“Across the countries we consider, Israel is the only one that we currently expect to join the ‘negative rates club’ over the course of 2016, as we expect the Bank of Israel to lower its policy rate from 0.1 percent to minus-0.1% over the next three months or so,” the analysts wrote.Negative interest rates, once considered an unthinkable and radical step, essentially charge banks for holding onto money, thus giving them an incentive to lend or buy assets.Banks might pass on the negative interest rates to their depositors, giving people a reason to spend their money instead of keeping it in the bank.Last week, Federal Reserve Chairwoman Janet Yellen was questioned about the possibility of negative interest rates in the US and said: “We wouldn’t take those off the table, but we have work to do to judge whether they would be workable here.”The Citibank analysis was skeptical that negative rates would be effective. In Israel, the analysis predicted, the consistent negative inflation would wear down the Bank of Israel Monetary Committee, spurring it to action. It blamed negative inflation on the strength of the shekel, which is at an alltime high against a basket of currencies.Bank of Israel Governor Karnit Flug has said in the past that the central bank was open to using unconventional policies. But she has attributed the causes of negative inflation to low global commodity prices and government actions that have reduced taxes and fees affecting consumers.Ofer Klein, the head of economics and research at Harel Insurance and Finance, believes Flug’s analysis is correct, and predictions of negative interest rates in the near future are misplaced.“It’s too soon,” he said.“It’s too early to talk about it, because the negative inflation we’ve seen in the last year comes from two causes exogenous to the Israeli economy.”Negative interest rates can also harm bank profitability, which would raise concerns about financial stability and inflate asset bubbles, Klein said.Israel is grappling with an apparent real-estate bubble, and a negative interest rate could make the problem worse, he said.Another reason to be skeptical of negative rates, Klein said, was that Israeli consumer demand was rather high, which obviates one goal of lowering rates. The central bank has better tools at its disposal, he said. “If they’re already talking about expansion, we can keep buying foreign exchange,” Klein said. “There are other things we can do, and I don’t think a negative interest is the right path – certainly not now.”The Bank of Israel had no comment on the report.