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BOJ Kuroda: No need to exempt quake-related deposit rises from minus rates
[TOKYO] Bank of Japan Governor Haruhiko Kuroda said on Tuesday he saw no need to grant exemptions from negative interest rates to financial institutions facing an inflow of donation and subsidy funds to deal with this month's quake in southern Japan.
"Negative interest rates apply to only a small portion of financial institutions' excess reserves, so most of them receive a net interest rate payment from the central bank," Mr Kuroda told parliament.
Under its negative interest rate policy decided in January, the BOJ charges a 0.1 per cent interest to a portion of excess reserves financial institutions park with the central bank in the hope that they would boost lending instead of hoarding cash.
Some lawmakers have said the policy would penalise regional financial institutions that could see a sharp increase in excess reserves as quake-related donations and subsidies flows in.