The Bank of Japan will introduce a new system to support SMEs at an extraordinary monetary policy meeting

BOJ to introduce new system for SME support at extraordinary monetary policy decision meeting May 22, 6:06

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The Bank of Japan will hold an extraordinary monetary policy decision meeting on the 22nd to introduce a new system to support the difficult cash flow of SMEs affected by the new coronavirus.

The Bank of Japan will hold an extraordinary monetary policy meeting from 9 am on the 22nd. The BOJ's meetings are held eight times a year, but extraordinary meetings are unusual.

At the meeting, as a measure to support SMEs whose cash flow is becoming difficult due to the government's economic measures, this month we will introduce a new system to increase the 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 plan to raise new maximum benefits for employment adjustment subsidies and employment adjustment subsidies, but the Bank of Japan is on track. It seems that there is an urgent need for support.