The Bank of Japan's extraordinary monetary policy decision meeting begins to introduce a new system to support SMEs May 22 9:16
The Bank of Japan has held an ad hoc monetary policy meeting from 9 am on the 22nd. We are deciding to introduce a new system to support the difficult cash flow of SMEs affected by the new coronavirus.
The BOJ's meetings are held eight times a year, but extraordinary meetings are unusual.
At the meeting, as a measure to support small and medium-sized enterprises whose cash flow is becoming difficult due to the government's economic measures, this month we will decide to introduce a new system to increase real interest-free and unsecured lending by private financial institutions .
It is a mechanism that encourages the Bank of Japan to proactively lend money to private financial institutions that have made loans by issuing funds at an interest rate of 0%.
At the meeting held on the 27th of last month, the Bank of Japan made an additional monetary easing to buy ample amount of JGBs and provide ample funds to the market to support the rapidly deteriorating economy.
However, the business is becoming more severe as many companies such as Renown, a major apparel company, applied for the Civil Rehabilitation Law, causing corporate failures due to the effects of the new coronavirus.
The government is in the process of formulating a second supplementary budget to implement additional economic measures, but it seems that the Bank of Japan is in a rush to provide support in line with it.