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MNI BRIEF: BOJ To Offer Zero Rate, Longer-Term Climate Funds

(MNI) Tokyo
TOKYO (MNI)

The Bank of Japan will provide longer-term liquidity to financial institutions to support their efforts to address climate change issues, according to the outline of new measures released on Friday.

Funds will be provided for one year in principle but can be rolled out within the amounts outstanding of eligible investment or loans for an unlimited number of times.

The BOJ will extend zero interest rate loans and the bank looks to financial institutions to add twice as much as the amount outstanding of funds to the Macro Add-on Balances (zero interest rate, not -0.1%) instead of paying the interest rate.

As for eligible investments or loans, the BOJ said, funds will be provided against those that contribute to Japan's actions to address climate change.

These may include green loans/bonds, sustainability-linked loans/bonds with performance targets related to effects on climate change and transition finance.

The BOJ will launch the measure likely within 2021 and the measure will be implemented until the end of March 2031 in principle (unless the smooth conduct of market operations is interfered).

MNI Tokyo Bureau | +81 90-2175-0040 | hiroshi.inoue@marketnews.com
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MNI Tokyo Bureau | +81 90-2175-0040 | hiroshi.inoue@marketnews.com
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