OTARU, Hokkaido (Kyodo) Bank of Japan Deputy Gov. Hirohide Yamaguchi suggested Wednesday that the central bank is not ready to immediately reintroduce a zero-interest-rate policy to boost the economy, underlining the possible negative impact from the unconventional monetary policy.
“We will not reject (the policy) totally” amid the global economic recession, Yamaguchi said. But he also said the BOJ’s key interest rate, currently at 0.1 percent, is already extremely low.
It is uncertain what positive outcome the BOJ could bring about by lowering borrowing costs further, he said, adding that such a move could have “demerits” like “harming smooth (money market) trading between financial institutions.”
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