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Finance

Bank of Japan may extend program encouraging lending

TOKYO -- The Bank of Japan will consider extending a program designed to provide low-interest loans for financial institutions that boosted lending, in order to supplement monetary easing and stimulate demand for funds among businesses.

     At a monetary policy meeting on Tuesday and Wednesday, the BOJ plans to discuss prolonging the measure by a year beyond the March 31 projected end date. The central bank will make a final decision by its next meeting, scheduled for Feb. 17-18.

     Private-sector institutions can currently borrow up to double the increase in their lending to retail and corporate customers. For an annual 0.1% rate from the BOJ, borrowers can hold on to the funds for a maximum of four years.

     Outstanding loans under the program came to about 19 trillion yen ($161 billion) as of Saturday. That figure jumped by roughly 270% in a year.

     Many of these financial institutions have called on the central bank to extend the four-year cap, an option the BOJ will also be considering.

(Nikkei)

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