BoJ to dou­ble loans to com­mer­cial len­ders

The Pak Banker - - Front Page -

TOKYO: The Bank of Ja­pan said it will dou­ble the amount of loans it ex­tends to com­mer­cial len­ders at its next in­stall­ment of a pro­gram to en­cour­age in­vest­ment in com­pa­nies in growth ar­eas, to meet in­creased de­mand.

The cen­tral bank will ex­tend 998.3 bil­lion yen ($11.9 bil­lion) in a sec­ond in­stall­ment of a 3-tril­lion yen fa­cil­ity it un­veiled in April, it said in a state­ment in Tokyo to­day. Some 106 fi­nan­cial in­sti­tu­tions are par­tic­i­pat­ing in the pro­gram, swelling from the 47 that par­tic­i­pated in the first round, the cen­tral bank said.

The credit fa­cil­ity ex­tends one-year loans to com­mer­cial len­ders at 0.1 per­cent to en­cour­age lend­ing for projects that can in­duce de­mand and in­vest­ment to help spur the coun­try's eco­nomic growth and beat de­fla­tion. BOJ Gover­nor Masaaki Shi­rakawa yes­ter­day said that the pro­gram is en­cour­ag­ing more pri­vate len­ders to set up their own funds to fi­nance ven­tures in growth ar­eas. BOJ pol­icy mak­ers have said boost­ing growth and in­creas­ing de­mand are cru­cial to end­ing price de­clines that have plagued the econ­omy for more than a decade. The cen­tral bank's loans can be rolled over for up to four years.

The BOJ has said the loans should be used for projects in­clud­ing the devel­op­ment of en­ergy and so­cial in­fra­struc­ture, en­vi­ron­ment pro­tec­tion and med­i­cal and nurs­ing ini­tia­tives.

Lend­ing to as­sist in­vest­ment and busi­nesses in the Asian re­gion in­creased to 93.7 bil­lion yen, ris­ing more than seven times since the first of­fer­ing, ac­cord­ing to the bank. Funds will be ex­tended to len­ders on Dec. 7.

Asked if the cen­tral bank in­tends to in­crease the size of the pro­gram from the cur­rent 3 tril­lion yen, Shi­rakawa yes­ter­day said the bank will watch the devel­op­ment of the pro­gram be­fore mak­ing a de­ci­sion. - PB News

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