The Bank of Japan wants to boost the economy with 2,000 billion yen in loans at low rates
The Bank of Japan said Tuesday it would lend to banks 2,000 billion yen extra (18.5 billion euros) low interest rates to support growth, following a meeting of his committee monetary policy.
The institute said in a statement that the total amount of the overdraft facility offered to financial institutions would increase from 3,500 billion yen to 5,500 billion yen (51 billion euros).
These funds are for banks that want to lend to companies active in sectors considered strategic for the country's growth (research and development, investment in Asia, environment and energy, medicine, care of children and seniors, tourism and agriculture particular).
This program was launched by the BoJ in June 2010. It is separate from the heart of monetary easing measures taken by the institute, which consist of the acquisition of government bonds and corporate and other financial securities, and the issuing of loans to prime rate.
At its last meeting in mid-February, the BoJ had surprised economists and markets by raising 10,000 billion yen (92 billion euros) its planned purchases of Japanese government bonds, bringing to 65,000 billion yen (600 billion euros) the total amount of its core program.
The measures announced Tuesday, bringing on new much smaller amounts, were presented by the institute as "a result" of the monetary easing of February.
In detail, the 2,000 billion yen in additional loans include 500 billion yen for large projects and another 500 billion for loans to both small (less than 10 million yen), at a rate of 0.1%.
The 1,000 billion yen will be provided in the form of dollar loans at the rate prevailing in the relevant markets.
All of these loans will run until 30 June 2014. The BoJ has extended the duration of loans so far, initially due to expire June 30, 2012.
The BoJ has also held, unanimously and unsurprisingly, its main interest rate between 0.0% and 0.1% in order to facilitate the movement of money and encourage activity.