Bank Of Japan Maintains Stimulus; Unveils Outline For Green Lending Facility
16 July 2021 - 2:55PM
RTTF2
The Bank of Japan decided to leave its monetary stimulus
unchanged and provided an outline for the new programme to support
efforts on climate change, through which the apex bank plans to
offer long-term loans at zero percent interest.
The central bank also lowered its near-term growth outlook
citing the impact of the coronavirus pandemic and raised its fiscal
2021 inflation forecast.
The board, governed by Haruhiko Kuroda, on Friday, voted 8-1, to
hold the interest rate at -0.1 percent on current accounts that
financial institutions maintain at the central bank.
The bank will continue to purchase a necessary amount of
Japanese government bonds without setting an upper limit so that
10-year JGB yields will remain at around zero percent.
The BoJ provided a preliminary outline for a new-funding
programme to support efforts in fields related to climate change.
The bank plans to launch the measure this year and to continue
until March 2031.
The BoJ has shifted from crisis mode towards addressing
long-term structural issues, Marcel Thieliant, an economist at
Capital Economics, said.
"With the vaccination program now at cruising speed, we suspect
that the Bank won't extend the deadline for its COVID-19 facilities
beyond March 2022," Thieliant added.
In the latest quarterly report, the bank forecast the economy to
expand 3.8 percent in the fiscal 2021 instead of 4 percent
estimated in April.
However, the outlook for the fiscal 2022 was lifted to 2.7
percent from 2.4 percent and the estimate for the fiscal 2023 was
retained at 1.3 percent.
Citing higher energy prices, the bank raised its inflation
forecast to 0.6 percent for the fiscal 2021 from 0.1 percent
projected previously.
Inflation forecast for the next fiscal was lifted marginally to
0.9 percent from 0.8 percent and the outlook for the fiscal 2023
was maintained at 1 percent.
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