Bank of Japan to introduce new system of support for small and medium-sized enterprises at extraordinary monetary policy meeting

Bank of Japan to introduce new system of support for small and medium-sized enterprises at extraordinary monetary policy meeting May 22 at 6:06

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The Bank of Japan will hold an extraordinary monetary policy meeting on Tuesday to decide on the introduction of a new system to support the tight financing of small and medium-sized enterprises affected by the new Coronavirus.
The Bank of Japan will hold an extraordinary monetary policy meeting from 1 a.m. The Bank of Japan’s meetings are held once a year, but it is unusual to hold temporary meetings.

At the meeting, the government will decide to introduce a new system to increase real interest-free and unsecured loans by private financial institutions this month as a support measure for small and medium-sized enterprises that are becoming more financially funded by the government’s economic measures.

This is a mechanism that encourages private financial institutions that have implemented loans to actively finance by issuing funds at an interest rate of 0¢.

At a meeting held last month, the Bank of Japan decided to implement additional monetary easing to provide ample funds to the market by buying government bonds without a limit to support the rapidly deteriorating economy.

However, the economy is becoming more severe due to a series of corporate collapses caused by the new coronavirus, such as the application of the Civil Rehabilitation Act by apparel giant Renaun.

The government is working on a draft budget for the Second Amendment to raise the cap on new benefits and employment adjustment subsidies for businesses that have difficulty paying rents, but the Bank of Japan is also expected to take a step forward and rush to provide assistance.